Lone Star State HELOC Rules

[Tia Wilson]

Hey there everyone,

I'm new to Texas and im trying to understand the rules for a HELOC for my duplex househack. I understand we can't do more than 80% LTV in Texas but I apparently misunderstood how this works as I was denied today BEFORE an appraisal was even ordered. So before I put my negotiating hat on tomorrow I wanted to further educate myself.

The way I understand it HELOCs work ARV-current mortgage balance= equity. I can HELOC 80% of equity amount.

However bank says its current mortgage balance + requested HELOC amount must equal 80% of ARV or more.

This didn't make sense to me but wanted to ask if anyone had different experience?