Texas Property Law — Cheatsheet

Community Property vs. Separate Property

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Key rule: Title vesting doesn't control — a home titled only in wife's name but purchased with marital wages is still community property. Both spouses must sign to convey.

Tracing: If separate property funds were used, document the flow to preserve separate character. Without tracing, community funds can create a community interest.

Texas Homestead Protections

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5 Liens That CAN Be Enforced Against Homestead

Ad valorem (property) taxes

Purchase money mortgage (used to buy the property)

Section 50(a)(6) home equity loan (meeting constitutional requirements)

Mechanic's/materialman's lien (both spouses sign; for work actually performed)

Owelty of partition (equalization payment in divorce)

Everything else (credit cards, medical bills, personal loans, judgments for unsecured debt) cannot force the sale of a Texas homestead.

Section 50(a)(6) Home Equity Loans

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Formula: Home worth $500K. Existing mortgage: $340K. Max total liens: $400K (80%). Max new home equity loan: $60K.

Texas Deed of Trust Structure

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Non-Judicial Foreclosure Timeline

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VLB Programs Summary

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Type	Definition	Examples	Who Conveys
Community property	Acquired during marriage (income, purchases, investments)	Home bought with marital wages; stocks purchased after wedding	BOTH spouses must sign
Separate property	Pre-marriage; gift; inheritance; personal injury damages	Home owned before wedding; inherited money; gift from parents	Owner alone
Feature	Detail
Urban homestead	Up to 10 contiguous acres in a city or subdivision
Rural homestead (single adult)	Up to 100 acres
Rural homestead (family)	Up to 200 acres
Protection	Forced sale prohibited for most unsecured debts
Conveyance	Both spouses must sign deed for homestead
Constitutional basis	Texas Constitution, Article XVI
Rule	Detail
Max LTV	All liens combined ≤ 80% of FMV
Waiting period	12 days after application or disclosure receipt
Rescission right	3 business days after closing
One-loan limit	Only one 50(a)(6) loan per homestead at a time
Lender penalty for violation	Forfeiture — lender loses the lien entirely
HELOC	Separate rules under Section 50(t)
Applies to	Homestead only (not rental or investment property)
Party	Role
Trustor (borrower)	Conveys bare legal title to trustee; retains equitable title and possession
Trustee	Neutral third party; holds bare legal title; conducts sale on default
Beneficiary (lender)	Holds financial interest; receives proceeds at payoff or sale
Step	Rule
Notice of Default	Sent after missed payments; opportunity to cure
Notice of Sale	At least 21 days before sale; sent by certified mail, filed with county clerk, posted at courthouse
Foreclosure sale	First Tuesday of the month, 10am–4pm, at county courthouse
Deed issued	Substitute Trustee's Deed (no title warranty)
Right of redemption	NONE for standard residential deed of trust
Deficiency judgment	Capped at debt minus FMV; 2-year statute of limitations
Program	Purpose	Key Limit / Feature
VLB Land Loan	Purchase rural TX land	Agricultural, wildlife, or recreational use
VLB Home Loan	Buy a primary residence	No PMI required
VLB Home Improvement Loan	Improve existing home	Maximum $50,000

Eligibility: Texas resident + honorable discharge + ≥90 days active duty service (or active-duty stationed in TX)

Stacking: VLB Home Loan can sometimes be combined ("stacked") with a federal VA loan.

Common Exam Traps

• Community property ≠ sole-name title — characterization follows how it was acquired, not how title is vested

• Both spouses must sign to convey any community real property (especially homestead)

• 80% LTV cap = ALL liens combined, not just the new home equity loan

• No right of redemption after non-judicial TX deed of trust foreclosure

• First Tuesday rule — foreclosure sales always on first Tuesday of the month at the courthouse

• 21-day notice — not 30 days, not 14 days

• Deficiency capped at FMV — lender cannot sue for the difference between the low auction price and the debt if FMV was higher

• VLB ≠ VA loan — VLB is Texas state-funded; VA is federal; they can be stacked

• Home equity loan = homestead only — rental/investment properties cannot use Section 50(a)(6)

• Forfeiture is the nuclear option — violating Section 50(a)(6) requirements means the lender loses the lien entirely