An equity loan must not be secured by any additional real or personal property other than the homestead. The definition of "homestead" is located at Section 51 of Article XVI, Texas Constitution, and Chapter 41 of the Texas Property Code.     
       (1) A lender and an owner or an owner's spouse may enter into an agreement whereby a lender may acquire an interest in items incidental to the homestead. An equity loan secured by the following items is not considered to be secured by additional real or personal property:                (A) escrow reserves for the payment of taxes and insurance;                 (B) an undivided interest in a condominium unit, a planned unit development, or the right to the use and enjoyment of certain property owned by an association;                 (C) insurance proceeds related to the homestead;                 (D) condemnation proceeds;                 (E) fixtures; or                 (F) easements necessary or beneficial to the use of the homestead, including access easements for ingress and egress.        
       (2) A guaranty or surety of an equity loan is not permitted. A guaranty or surety is considered additional property for purposes of Section 50(a)(6)(H). Prohibiting a guaranty or surety is consistent with the prohibition against personal liability in Section 50(a)(6)(C). An equity loan with a guaranty or surety would create indirect liability against the owner. The constitutional home equity lending provisions clearly provide that the homestead is the only allowable collateral for an equity loan. The constitutional home equity provisions prohibit the lender from contracting for recourse of any kind against the owner or owner's spouse, except for provisions providing for recourse against the owner or spouse when the extension of credit is obtained by actual fraud.      
       (3) A contractual right of offset in an equity loan agreement is prohibited.      
       (4) A contractual cross-collateralization clause in an equity loan agreement is prohibited.      
       (5) Any equity loan on an urban homestead that is secured by more than ten acres is secured by additional real property in violation of Section 50(a)(6)(H).      
     Source Note:        The provisions of this §153.8 adopted to be effective January 8, 2004, 29 TexReg 84; amended to be effective November 24, 2016, 41 TexReg 9106; amended to be effective November 26, 2020, 45 TexReg 8307