Second home loans in Texas
The state where the escrow line does the most damage to a debt-to-income calculation, because a second home does not get the homestead exemption and the coast does not get cheap insurance.
Where second home buying concentrates in Texas
Texas second home demand sits in three broad areas, all of them within a few hours of the major metros.
- The Hill Country, around Fredericksburg, Wimberley, Blanco, Boerne and Kerrville, where second homes range from in-town historic properties to ranchettes on substantial acreage.
- The Highland Lakes, meaning Lake Travis, Lake LBJ, Lake Marble Falls and Horseshoe Bay, the closest lake second home market to Austin and heavily waterfront oriented.
- Port Aransas, Mustang Island and Rockport, the central coast market serving San Antonio and Austin, with a large condominium and beach house stock.
- Galveston and Bolivar Peninsula, the Houston coastal market, where elevation, windstorm coverage and flood zones are central to every purchase.
- South Padre Island at the southern tip, a condominium-dominated market with a strong seasonal rental economy.
- Lake Conroe, Possum Kingdom and Cedar Creek, the inland reservoirs that serve Houston and the Dallas and Fort Worth area as weekend markets.
Those are descriptions of where the market is, not a claim about prices or returns. In Texas the running cost of the property matters to the loan as much as the purchase price does.
Source: U.S. Census Bureau, American Community Survey 5-year estimates, 2023, tables B25004 and B25001.
What usually decides a Texas file
The homestead exemption does not follow you to a second home
Texas grants a residence homestead exemption on property taxes, and the Comptroller's published guidance is explicit that to qualify, an individual must use the property as the individual's principal residence
, citing Tax Code Section 11.13(b). A second home is not a principal residence, so the exemption does not apply to it. That matters on a loan file because property taxes are part of the housing payment an underwriter counts, and buyers who reason from what they pay on their own house tend to understate it.
Source: Texas Comptroller of Public Accounts, property tax exemptions, citing Tax Code Section 11.13(b).
Coastal insurance, which is its own workstream
On Galveston, the Bolivar Peninsula, Mustang Island and South Padre, windstorm and flood coverage are separate considerations from ordinary homeowner's insurance, and they have to be in place at closing. Start the insurance conversation the day you go under contract. On the Texas coast it is regularly the item that decides the closing date rather than the loan.
Both payments, counted together
Because the tax and insurance lines on a Texas second home are heavier than buyers expect, the debt-to-income calculation is where files get uncomfortable. You are measured on the new payment plus the mortgage you already carry plus everything else on your credit report, against documented income. Running that arithmetic with realistic escrow figures, rather than optimistic ones, is worth doing before you make an offer.
Fredericksburg, the lakes, and the rental question
Both the Hill Country towns and the coastal markets have visible short-term rental economies. A second home cannot be subject to any agreements that give a management firm control over the occupancy
and must be under the borrower's exclusive control, and rental income cannot be used for qualifying on a second home. Where the plan is genuinely a rental business, the Eligibility Matrix caps a one-unit investment property at 85% loan-to-value against 90%, with six months of reserves under Desktop Underwriter rather than two.
Source: Fannie Mae Selling Guide, Eligibility.
Which guides matter most here
For a Texas purchase, these three are the ones that matter.
Licensing in Texas
Residential Mortgage, LLC is authorized to close loans in Texas, one of the 22 states on the company's published authorization list. Bryan Piccolomini holds NMLS #228509 and Residential Mortgage, LLC holds NMLS #167729. Both can be checked independently on NMLS Consumer Access. Fuller detail is on the licensing page.
Common questions
Can Bryan lend on a second home in Texas?
Yes. Residential Mortgage, LLC is authorized to close loans in Texas, one of the 22 states on the company's published list, and Bryan Piccolomini holds NMLS #228509.
Do I get the homestead exemption on a Texas second home?
No. The Texas Comptroller's published guidance requires an individual to use the property as their principal residence to qualify for the residence homestead exemption, citing Tax Code Section 11.13(b). A second home is not a principal residence, so the property tax line in your escrow will not be reduced by it. Budget for that when you estimate the payment.
How much of a problem is coastal insurance?
It is a genuine workstream rather than a formality. Windstorm and flood are separate from standard homeowner's coverage on the Texas coast, and everything has to be bound before closing. Starting when you go under contract is the single most useful thing you can do to protect the closing date.
Can I rent out my Fredericksburg place when I am not there?
Occasional rental is contemplated on a second home, but the income cannot be used to qualify and the property cannot be subject to an agreement giving a management firm control over the occupancy. If the rental income is the purpose of the purchase, it is an investment property file.
More states: all 22. Run the arithmetic first on the calculators page.
Run the payment with real escrow figures
On a Texas second home the tax and insurance lines are what surprise people. Better to see them before the offer.