Question 1

Do Texas homestead rules limit a second mortgage on my New Braunfels rental?

Accepted Answer

Not when the rental is not your homestead. Article XVI, section 50 of the Texas Constitution limits liens on a homestead to a short list, and a lien outside that list is invalid. That list is where the Texas home equity rules come from: consent of each owner and spouse, an 80% cap on all homestead debt against value, a 2% fee cap with some exclusions, and foreclosure only by court order. They apply to the homestead, not to a rental that is not your homestead. Homestead status turns on how the property is used and what the owner intends, and title companies can treat a borrower's only Texas residential property as homestead by default, so expect occupancy to be confirmed, not assumed. This is not legal advice; your attorney or title company has the final say on your property. The Texas investment property second mortgage guide covers the state rules in more depth.

Question 2

What happens to a second lien on a New Braunfels rental if the first is foreclosed?

Accepted Answer

The second can be wiped out, so position matters. Texas courts have held that foreclosure of a senior lien extinguishes junior liens, and a deed of trust on a rental is usually foreclosed outside court under Property Code section 51.002: sales run between 10 a.m. and 4 p.m. on the first Tuesday of the month at the courthouse of the county where the property sits, after at least 21 days of notice. Comal County holds its sales on the Northeast Courthouse steps outside the historic Comal County Courthouse at 100 Main Plaza, and the trustee named on each notice takes the questions. A second only works if the first mortgage stays current, and if you refinance the first later, the second-lien holder generally has to sign a resubordination agreement so the new first keeps its position. Read lien position explained before you stack debt.

Question 3

Where does a second lien on a New Braunfels rental record, and what does it cost?

Accepted Answer

At the county clerk for the county the parcel sits in, which inside New Braunfels can be Comal or Guadalupe. The city limits cross the county line, so check the parcel before you plan the closing. Guadalupe County's clerk charges $25 for the first page and $4 for each additional page, effective January 1, 2025. A 6-page deed of trust would record for $45 ($25 + 5 x $4), an illustration, not a quote for your documents. Guadalupe lists CSC, eRecording Partners Network, Simplifile, HopDox and ValueCheck as its eRecording vendors. For a Comal County parcel, get the current fee from the Comal County Clerk or your title company before closing.

Question 4

Where does New Braunfels allow short-term rentals?

Accepted Answer

Not in residential zoning, and only with a permit in most other districts. The city states that short-term rentals are not allowed in any residential zoning district. In non-residential districts they need a special use permit, except in the C-4, C-4A and C-4B districts, and they are not allowed in the floodway. Permitted rentals go through an annual Fire Marshal life-safety inspection and remit hotel occupancy tax monthly under section 144-5.17 of the city code. On June 18, 2026, the Fifth Circuit affirmed the city's rules in Marfil v. City of New Braunfels, holding that owners have no protected property interest in short-term leasing. Short-term rentals are eligible for our program, and the city's zoning is a separate question to settle for the parcel first. Subject to underwriting.

Question 5

Is a second mortgage on a rental treated like a consumer second in Texas?

Accepted Answer

Texas draws the line at purpose. The state's secondary mortgage loan chapter (Finance Code chapter 342) applies to loans extended primarily for personal, family or household use, and the residential mortgage licensing chapters define a covered loan the same way. Whether a loan is business purpose depends on its facts, so the purpose of the funds is the deciding fact. No Texas regulator guidance we found speaks to business-purpose seconds directly, so this is not a licensing opinion. Talk to your attorney about your own structure.

Question 6

What property tax should I budget on a New Braunfels rental before I add a second payment?

Accepted Answer

The full rate for your side of the county line, with no homestead exemption or 10% cap. For tax year 2025, a New Braunfels parcel in Comal County and New Braunfels ISD carries 1.751651 per $100 of value (county, city and school district combined); the same city and school district on the Guadalupe County side carries 1.777036. On a $300,000 rental that is about $5,255 a year in Comal ($300,000 / $100 x 1.751651) against about $5,331 in Guadalupe. Those totals leave out utility districts: a municipal utility district can add a lot, and Meyer Ranch MUD alone levies 0.95. Pull the parcel's own tax account, and talk to your CPA about your own numbers.

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