source:
  type: regulation
  id: fnma-sel-b5-4.1-02
  authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
  description: "Fannie Mae Single Family Selling Guide topic B5-4.1-02 (Texas Section 50(a)(6) Loan Eligibility).\
    \ Gap-fill (verbatim, ID-diff). \n"
obligations:
- id: fnma-sel-b5-4.1-02-0
  canonical_id: fnma-sel-b5-4.1-02-0
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: Introduction This topic contains information
    on Texas Section 50(a)(6) loan eligibility, including: Reﬁnance Classiﬁcations Eligible Loan Products and Transaction
    Types Texas Section 50(a)(6) Loan Security Property Reﬁnance Classiﬁcations Lenders should be aware that Fannie
    Mae’s…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'Introduction This topic contains information on Texas Section 50(a)(6) loan eligibility, including:
      Reﬁnance Classiﬁcations Eligible Loan Products and Transaction Types Texas Section 50(a)(6) Loan Security
      Property Reﬁnance Classiﬁcations Lenders should be aware that Fannie Mae’s classiﬁcation of loan transactions
      as “cash-out reﬁnance” or “limited cash-out reﬁnance” may diﬀer from the way loans are classiﬁed under Texas
      law. Lenders should not rely on Fannie Mae’s categorization of reﬁnance loans for purposes of determining
      whether compliance with the provisions of Texas Constitution Section 50(a)(6) is required. Rather, such lenders
      should consult with their counsel to determine the applicability of Texas Constitution Section 50(a)(6) to
      a particular loan transaction. Texas law determines whether or not a loan is a Texas Section 50(a)(6) loan,
      and Fannie Mae’s policy determines whether the loan must be delivered as a cash-out reﬁnance transaction or
      as a limited cash-out reﬁnance transaction. The lender is responsible for determining: the applicability of
      Texas Constitution Section 50(a)(6) regardless of Fannie Mae’s deﬁnitions of cash-out and limited cash-out
      reﬁnance transactions; and if the loan should be delivered to Fannie Mae as a cash-out reﬁnance or a limited
      cash-out reﬁnance transaction, including the applicable special feature codes and payment of all applicable
      LLPAs. All loans that constitute Texas Section 50(a)(6) loans under Texas law must comply with these provisions,
      regardless of whether the loan is classiﬁed as a “cash-out reﬁnance” or “limited cash-out reﬁnance” in the'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-1
  canonical_id: fnma-sel-b5-4.1-02-1
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: Texas Section 50(a)(6) Loan Underwriting, Collateral,
    and Closing Considerations For any reﬁnance of a Texas Section 50(a)(6) loan that results in a loan originated
    in accordance with and secured by a lien permitted by Article XVI, Section 50(a)(4) of the Texas Constitution,
    an a…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'Texas Section 50(a)(6) Loan Underwriting, Collateral, and Closing Considerations For any reﬁnance
      of a Texas Section 50(a)(6) loan that results in a loan originated in accordance with and secured by a lien
      permitted by Article XVI, Section 50(a)(4) of the Texas Constitution, an aﬃdavit referenced in Section 50(f-1)
      Article XVI of the Texas Constitution must be prepared and recorded in connection with each such transaction.
      Eligible Loan Products and Transaction Types Texas Section 50(a)(6) loans must be fully amortizing loans with
      payments due on a monthly basis. The following are eligible as Texas Section 50(a)(6) loans:'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-2
  canonical_id: fnma-sel-b5-4.1-02-2
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: , 2026 755 ﬁrst lien mortgages only; ﬁxed-rate
    loans; and ﬁve-, seven-, and ten-year ARM plans (4927, 4928, and 4929 Texas 50(a)(6), respectively). Note: These
    ARM plans should be structured in the same way that they are for other loans, except that the loan may not be
    assumable …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: ', 2026 755 ﬁrst lien mortgages only; ﬁxed-rate loans; and ﬁve-, seven-, and ten-year ARM plans
      (4927, 4928, and 4929 Texas 50(a)(6), respectively). Note: These ARM plans should be structured in the same
      way that they are for other loans, except that the loan may not be assumable at any time over its full term.
      Only the ARM plans listed above are eligible, due to the MBS disclosure impact resulting from the non-assumable
      nature of these ARMs. The following are not eligible as Texas Section 50(a)(6) loans: loans that are not in
      ﬁrst-lien position, ARM plans not listed above, and loans with temporary interest rate buydowns. Texas Section
      50(a)(6) Loan Security Property A Texas Section 50(a)(6) loan must be secured by a single-unit principal residence
      constituting the borrower’s homestead under Texas law. Loans secured by two- to four-unit properties, investment
      properties, or second homes are not eligible. The security property may be a detached dwelling, an attached
      dwelling, a unit in a PUD project, a unit in a condo project, or a manufactured home. (A manufactured home
      is eligible only if it is classiﬁed as real property under Texas law, and satisﬁes all special Fannie Mae
      eligibility criteria for manufactured homes.) The borrower’s homestead property may not exceed the applicable
      acreage limit as determined by Texas law when the Texas Section 50(a)(6) loan is originated. A borrower that
      owns adjacent land must submit appropriate evidence, such as a survey, that the mortgaged homestead property
      is a separate parcel that does not exceed the permissible acreage. Note: An inter vivos revocable trust that
      meets Fannie Mae''s borrower eligibility criteria (as described in'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-3
  canonical_id: fnma-sel-b5-4.1-02-3
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: Inter Vivos Revocable Trusts), may be a borrower
    under a Texas Section 50(a)(6) loan, provided that the trust meets the requirements for a "qualifying trust"
    under Texas law for purposes of owning residential property that qualiﬁes for the homestead exemption. Recent
    Related Anno…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: Inter Vivos Revocable Trusts), may be a borrower under a Texas Section 50(a)(6) loan, provided
      that the trust meets the requirements for a "qualifying trust" under Texas law for purposes of owning residential
      property that qualiﬁes for the homestead exemption. Recent Related Announcements The table below provides
      references to recently issued Announcements that are related to this topic.
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-4
  canonical_id: fnma-sel-b5-4.1-02-4
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: , 2026 756 Announcements Issue Date Announcement
    SEL-2020-07 December 16, 2020 Announcement SEL-2020-02 April 01, 2020'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: ', 2026 756 Announcements Issue Date Announcement SEL-2020-07 December 16, 2020 Announcement
      SEL-2020-02 April 01, 2020'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-5
  canonical_id: fnma-sel-b5-4.1-02-5
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: Texas Section 50(a)(6) Loan Underwriting, Collateral,
    and Closing Considerations (03/04/2026) Introduction This topic contains information on Texas Section 50(a)(6)
    loan underwriting, collateral, and closing considerations, including: LTV/CLTV Ratios Underwriting Property
    Valuati…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'Texas Section 50(a)(6) Loan Underwriting, Collateral, and Closing Considerations (03/04/2026)
      Introduction This topic contains information on Texas Section 50(a)(6) loan underwriting, collateral, and
      closing considerations, including: LTV/CLTV Ratios Underwriting Property Valuation and Survey Loan Documentation
      Title Insurance LTV/CLTV Ratios Per Texas law, the maximum allowable LTV and combined LTV for any Texas Section
      50(a)(6) loan is 80%, notwithstanding any conﬂicting provisions of this Guide or any speciﬁc DU recommendation
      or ﬁnding. HELOC subordinate ﬁnancing is not permitted, hence a maximum HCLTV ratio is not applicable. Underwriting
      Texas Section 50(a)(6) loans are eligible for the reduced documentation requirements recommended by DU, provided
      that all other terms and conditions described herein for Texas Section 50(a)(6) loans shall apply. For a Texas
      Section 50(a)(6) loan that represents the reﬁnance of a prior Texas Section 50(a)(6) loan, the borrower must
      requalify even if the lender is currently servicing the existing loan that is being reﬁnanced. Manually underwritten
      Texas Section 50(a)(6) loans are subject to minimum credit score requirements per the'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-6
  canonical_id: fnma-sel-b5-4.1-02-6
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: , based on the transaction as either a cash-out
    reﬁnance or a limited cash-out reﬁnance, as applicable.'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: ', based on the transaction as either a cash-out reﬁnance or a limited cash-out reﬁnance, as
      applicable.'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-7
  canonical_id: fnma-sel-b5-4.1-02-7
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: , 2026 757 Property Valuation and Survey Lenders
    must obtain a new appraisal to determine the property''s current value even if DU oﬀers value acceptance, or
    a value acceptance + property data option. If the appraisal is deemed deﬁcient, refer to Guidance on Addressing
    Appraisal D…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: ', 2026 757 Property Valuation and Survey Lenders must obtain a new appraisal to determine
      the property''s current value even if DU oﬀers value acceptance, or a value acceptance + property data option.
      If the appraisal is deemed deﬁcient, refer to Guidance on Addressing Appraisal Deﬁciencies in'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-8
  canonical_id: fnma-sel-b5-4.1-02-8
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: Appraisal Quality Matters. The appraisal (together
    with any applicable desk review or ﬁeld review) must be attached to the written acknowledgment of "fair market
    value". Note: When a desk review or ﬁeld review is requested by the lender in connection with a Texas Section
    50(a)(6)…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'Appraisal Quality Matters. The appraisal (together with any applicable desk review or ﬁeld
      review) must be attached to the written acknowledgment of "fair market value". Note: When a desk review or
      ﬁeld review is requested by the lender in connection with a Texas Section 50(a)(6) loan, it must be obtained
      prior to the date of the note and mortgage. The appraisal for the property and the acknowledgment of fair
      market value must not include any property other than the homestead. The survey (or other acceptable evidence)
      must demonstrate that: the homestead property and any adjacent land are separate parcels, and the homestead
      property is a separately platted and subdivided lot for which full ingress and egress is available. The lender
      selling the loan to Fannie Mae must not have any interest (such as an option to purchase, a security interest,
      or an easement) in any parcel adjacent to the homestead property that is owned by the borrower, if such interest
      could constitute additional security for the Texas Section 50(a)(6) loan. Loan Documentation There is a special
      security instrument, notes, and riders that must be used in connection with Texas Section 50(a)(6) loans and
      a special aﬃdavit that must be prepared and recorded in connection with each Texas Section 50(a)(6) loan transaction.
      Lenders must use the following documents: Texas Home Equity Security Instrument (First Lien) (Form 3044.1)
      the speciﬁc Texas Section 50(a)(6) loan notes and riders, and Texas Home Equity Aﬃdavit and Agreement (First
      Lien) (Form 3185) Because of the complexities involved in closing Texas Section 50(a)(6) loans, lenders must
      provide the title company with a detailed closing instruction letter and require an acknowledgment of its
      receipt. The closing instructions must require the title company to conduct its closings properly to ensure
      compliance with Texas Constitution Section 50(a)(6). To assist in this endeavor, the Texas Home Equity Aﬃdavit
      and Agreement First Lien (Form 3185) must be prepared and recorded in connection with each Texas Section 50(a)(6)
      loan transaction. Fannie Mae suggests that a lender also require each borrower to sign a closing receipt that
      itemizes the documents that they received at closing. For additional Texas Section 50(a)(6) loan documentation
      (also called “Texas Home Equity” documentation) refer to Standard Texas Home Equity Notes (under Standard
      Instruments). Note: Texas Section 50(a)(6) loans are not eligible for delivery as eMortgages.'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
- id: fnma-sel-b5-4.1-02-9
  canonical_id: fnma-sel-b5-4.1-02-9
  section: Fannie Mae Single Family Selling Guide B5-4.1-02
  description: 'B5-4.1-02 Texas Section 50(a)(6) Loan Eligibility: , 2026 758 Title Insurance For all Texas Section
    50(a)(6) loans, a title insurance policy written on Texas Land Title Association forms (standard or short form),
    supplemented by an Equity Loan Mortgage Endorsement (Form T-42) and a Supplemental Coverage Equity Loan Mortgage
    Endor…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - fnma-guide
  - section-complete
  primary_source:
    tier: 1
    authority: Fannie Mae Single Family Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility (12/16/2020)
    source_class: gse-guide
    source_url: https://selling-guide.fanniemae.com/
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: ', 2026 758 Title Insurance For all Texas Section 50(a)(6) loans, a title insurance policy
      written on Texas Land Title Association forms (standard or short form), supplemented by an Equity Loan Mortgage
      Endorsement (Form T-42) and a Supplemental Coverage Equity Loan Mortgage Endorsement (Form T-42.1), is required.
      Note: There may be no exceptions or deletions to the coverage provided by Paragraphs 2(a) through (e) (other
      than an exception or deletion relating to the exclusion of agricultural homestead property) of the T-42 endorsement.
      The endorsement must include the optional coverage provided by Paragraph 2(f), as well as the additional coverage
      provided by Endorsement T-42.1. The title insurance policy cannot include language that: excludes coverage
      for a title defect that arises because ﬁnanced origination expenses are held not to be “reasonable costs necessary
      to reﬁnance”, or deﬁnes the “reasonable costs necessary to reﬁnance” requirement as a “consumer credit protection”
      law since the standard title policy excludes coverage when lien validity is questioned due to a failure to
      comply with consumer credit protection laws. Recent Related Announcements The table below provides references
      to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2026-02
      March 04, 2026 Announcement SEL-2025-07 September 03, 2025 Announcement SEL-2023-02 March 01, 2023 Announcement
      SEL-2019-07 August 07, 2019 Announcement SEL-2019-04 May 01, 2019'
    drafter_attestation: Verbatim from Fannie Mae Single Family Selling Guide B5-4.1-02 body (max-gap occurrence),
      snapshot 5f7b8b79da595d76; substring-verified.
  judgment: false
