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Program 11

Second Mortgage in San Marcos

A second mortgage on a San Marcos rental property.

Our second mortgage program lends $50K to $1M against non-owner-occupied 1 to 4 unit residential investment property worth at least $100,000, as a fixed-rate lump sum or line of credit from 6.99%, with combined loan-to-value up to 80%. Your first mortgage stays in place and the new loan sits behind it. A rental that is not your homestead sits outside the Texas home equity rules, and we confirm occupancy rather than assume it. San Marcos, Kyle and Buda deals record in Hays County, while Martindale and Maxwell record in Caldwell County. Business-purpose only, and every loan is conditional on the borrower and the property, subject to underwriting.

Second Mortgage in San Marcos, TX from USA Mortgage
$1M
max loan
80%
max CLTV
660
min FICO
3-4 weeks
to close

Typical figures, subject to underwriting and market conditions. Not a commitment to lend.

How it works

We lend against the equity in a rental you already own, as a lump-sum second or a line of credit, so your first mortgage and its rate stay in place. Combined loan-to-value, counting every lien, goes up to 80%, subject to underwriting. Check that your first mortgage allows a junior lien.

Who it's for
Rental owners who want to keep their first mortgage
Investors funding a down payment or renovation
Non-owner-occupied investment property only, including short-term rentals
Individuals and entities, such as an LLC
Borrowers with a 660 or higher credit score
Business-purpose use of the funds
Typical terms
Loan amount$50K to $1M
Lien positionFirst or second
Max CLTVUp to 80%
Min FICO660
RateFrom 6.99%*
Rate typeFixed
StructureLump sum or line of credit
Min DSCR1.00
Property1-4 units, $100K+ value
Prepay penalty0 to 5 years
Closing3-4 weeks
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*Typical terms, subject to underwriting and market conditions.

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Local FAQ

Second Mortgage in San Marcos, answered.

Can I put a second mortgage on a San Marcos rental under Texas homestead law?
Yes, as long as the rental is not your homestead. Article XVI, section 50 of the Texas Constitution allows liens on a homestead only for a closed list of debts, and the home equity rules on that list (consent of each owner and spouse, total homestead debt capped at 80% of value, a 2% fee cap with exclusions, foreclosure only by court order) protect the homestead. A rental you do not live in is outside them, and a second lien on it is an ordinary deed-of-trust lien. Homestead depends on use and intent, and title companies can treat your only Texas residential property as homestead by default, so occupancy gets verified. This is not legal advice; your attorney or title company has the final say. Terms are on the second mortgage program page, and the Texas investment property second mortgage guide covers more.

Sources: texaslegalguide.com, mortgagelaw.com

Can my LLC run more than one short-term rental in San Marcos?
No. The city limits a registrant to one short-term rental, and the limit reaches the entity's affiliates. Under the ordinance effective April 16, 2024, when the owner is a business organization, trust or other entity, no person or entity affiliated with it as an organizer, officer, member, manager, shareholder, trustee, beneficiary, partner, equity owner or investor may register or operate another short-term rental at a different address in the city. An LLC can be the owner, and the permit lists the owner, operator and agent, but an LLC portfolio gets one permit city-wide. Permits issue only after a passed safety inspection, renew yearly, and do not transfer: a new owner needs a new permit within 30 days. Short-term rentals are eligible for our second mortgage; confirm your permit status with the city before you count on short-term income.

Sources: sanmarcostx.gov

What does it cost to record a second lien deed of trust in Hays County?
About $25 for the first page and $4 for each added page, per the county schedule. The Hays County Clerk's Records Division schedule, effective January 1, 2024, bundles the $25 from a $5 recording fee, $10 records management and $10 archives, and adds $0.25 for each indexed name beyond five. A 6-page deed of trust would record for $45 ($25 + 5 x $4), an illustration, not a quote for your documents. The base fee is set by statute, which is why it matches most Texas counties. These are county fees, not USAM terms.

Sources: hayscountytx.gov

What happens to a second lien on a Hays or Caldwell County rental if the first is foreclosed?
A first-lien foreclosure can wipe out the second, so the first has to stay current. Texas liens like these are usually foreclosed outside court under Property Code section 51.002: a sale between 10 a.m. and 4 p.m. on the first Tuesday of the month, after at least 21 days of notice. Hays County says its postings and sales take place at the South Door of the Hays County Government Center, 712 S. Stagecoach Trail, San Marcos; Caldwell County holds its sales at the courthouse steps, 110 S. Main St., Lockhart. The notice of sale names the spot for each property. The Texas Supreme Court has held that foreclosure of a senior lien extinguishes inferior liens, which is why combined loan-to-value counts every lien. See lien position explained.

Sources: hayscountytx.gov, caldwellcounty.texas.gov, codes.findlaw.com

Is a business-purpose second on a San Marcos rental treated as a consumer loan in Texas?
Texas sorts it by purpose. Finance Code chapter 342, the secondary mortgage loan chapter, applies only to a loan extended primarily for personal, family or household use (among other conditions), and the residential mortgage licensing chapters define a covered loan the same way. A loan's purpose depends on its facts, so we ask what the money is for and whether you occupy the property. We found no Texas regulator guidance on business-purpose seconds specifically, so this describes the statutes and is not a licensing opinion. Talk to your attorney about your own structure.

Sources: texas.public.law

What city and tax items should I check on a San Marcos rental before borrowing against it?
Rental registration, the occupancy rule, floodplain status and the full tax stack. Long-term rentals (leases over 30 days) have had to register with the city under City Code section 34-821 since January 1, 2021, separate from any short-term rental permit. The investor property tax stack in San Marcos is about $2.0666 per $100 of value for tax year 2025, with no homestead exemption on a rental. In the floodplain, the city requires two feet of freeboard and treats work above 50% of value as a substantial improvement, so a river-adjacent rental may need an elevation certificate. Check each before you size a second, and talk to your CPA about the tax side. The second mortgage calculator shows the payment.

Sources: sanmarcostx.gov, hayscad.com

More Second Mortgage questions, answered on the program page

Resources

Guides for Second Mortgage

Second Mortgages · 6 min read
What Is a Second Mortgage on an Investment Property?
Read the guide
Second Mortgages · 6 min read
Second Mortgage vs Cash-Out Refinance on a Rental Property
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Second Mortgages · 5 min read
Second Mortgage vs HELOC on an Investment Property
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Second Mortgages · 6 min read
Investment Property Second Mortgage Requirements: What Lenders Check
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Browse all guides
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About the local figures on this page

Local rules move. Every tax rate, fee, ordinance and market figure here comes from a primary source and carries the date we read it, and we correct them as the rules change. Where a number is mid-change or we could not verify it, we say so rather than guess. Before you commit a budget, confirm anything that drives it with the city or county, and talk to your attorney or CPA on questions of law or tax.

Published by USA Mortgage Funding, LLC, NMLS #152588. Researched from primary sources by our team, drafted with AI assistance, and every figure checked against its source before publishing. Where an answer rests on a public record, that record is linked under it. Figures read on 2026-08-28.

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