What is the Texas Homestead Exemption?

The Texas Constitution and various statutory provisions establish and define the homestead rights in Texas. The homestead rights protect a family’s homestead from claims of creditors, both secured or unsecured, with the following exceptions.

A forced sale of a homestead can occur if the debt arises from either:

  • Funds borrowed to finance the initial purchase price of the homestead (e.g., a mortgage).
  • Funds borrowed to finance work and materials used in construction of permanent improvements on the homestead (if contracted for by both spouses before commencement of work and subsequently perfected with a validly-filed mechanic’s lien)
  • Taxes due on the homestead; including a federal tax lien (provided that the tax debt is the debt of both spouses).
  • Home equity or reverse mortgage loans.
  • An owelty of partition lien created upon partition of the property (this is sometimes done in connection with a divorce proceeding).
  • Certain assessments levied by property owners’ associations (HOAs).

Forced sale of a homestead cannot occur if the debt in question arises from typical consumer transactions. Put another way, automobile finance companies, issuers or credit cards, or holders of unsecured debt typically cannot foreclose on your homestead. This would also apply to the holders of most judgment liens.