Portfolio Loans in Texas

Underwrite it as gone after December 31, 2026, and treat an extension as upside. Texas Tax Code section 23.231 caps the annual increase in appraised value on non-homestead real property at 20%, plus the value of new improvements, for property at or below a threshold that indexes each year. It requires a full calendar year of ownership, it is stripped on sale, and by its own terms it expires December 31, 2026 unless the Legislature extends it. On one door that is a line item. Across a blanket loan it compounds, because every property in the pool loses the same protection in the same tax year and there is nothing else standing in its place: the 10% appraisal cap is homestead only and never applied to investment property. We size portfolio debt service on the go-forward assessed bill rather than the capped one. Have your CPA or property tax counsel run it against your specific parcels.

No. All of it runs to owner-occupants, and a door you do not live in is not a homestead. SB 4 raised the mandatory school district homestead exemption from $100,000 to $140,000, approved by voters as Proposition 13 in November 2025 for the 2026 tax year, and SB 23 raised the additional exemption for owners 65 and older or disabled from $10,000 to $60,000. Neither touches investment property, and neither does the 10% annual appraisal cap. The 2025 business personal property relief covers equipment and inventory, not the real property. That is the honest shape of the Texas trade for a portfolio owner: no state individual income tax on the rent, and an effective property tax rate of roughly 1.2% to 1.4% depending on the county, set locally and unchanged when a unit sits empty. Budget the full unexempted bill on every parcel and take the protest strategy to your CPA.

On what the doors actually collect. Statewide average apartment rent was $1,452 as of July 2026, down 0.97% year over year, and the Dallas Fed reported concessions running six to eight weeks free across Texas metros, reaching 10 to 12 weeks in some submarkets, with the highest concession share in Austin and then Dallas. Those are professionally managed apartment figures rather than a single-family read, but they tell you what a Texas tenant can negotiate right now, and free months come straight out of year-one coverage. Send the rent roll with concessions and vacancy shown, not the asking rents. Effective rent is the input to the ratio. You can pressure-test a door yourself with the DSCR calculator.

It helps the risk picture and it adds work to the file, and both are real. Texas is not one market. In the second quarter of 2026 prices rose in 14 Texas metros and fell in 11, with one flat, while the statewide median sat at $340,000, unchanged year over year on 99,688 closed sales. The state number is a poor proxy for any single deal, which is exactly why a pool spread across metros diversifies better than five doors on one street. The work comes from the county line: 254 counties, each with its own appraisal district, clerk recording practice, and commissioners-court-designated foreclosure sale area, so tax rates, assessment behavior, and recording turn times all vary by parcel. Give us the address-level detail per door and we underwrite it that way.

More than most out-of-state owners model, and it has been moving fast. Texas average homeowners premiums rose more than 55% between 2019 and 2024, and filed average rate changes with the state insurance department ran 11% in 2022, 21% in 2023, 19% in 2024, and 4.3% in 2025. On a blanket loan that is a portfolio-wide line, because a hail or wind event that reprices one North Texas market tends to reprice the whole schedule at renewal. Get bound quotes on the actual schedule of locations before you lock coverage assumptions, rather than trailing the seller's premiums forward. If a property will sit vacant during turns, price vacant-dwelling coverage separately.

The title premium is fixed by the state, and sale prices are not public. The Texas Insurance Commissioner is required by statute to fix and promulgate title insurance rates, and Order No. 2025-9697 cut basic premium rates 6.2% effective March 1, 2026. Above $100,000 the basic premium is computed by formula: the state's own worked example puts a $268,500 policy at $1,612. The premium on a given policy amount is identical at every title company in Texas, so on a multi-property file you shop execution, endorsements, and whether the company can run several parcels cleanly, not price. Texas is also a non-disclosure state, meaning no statute compels reporting a residential sale price to the appraisal district and the price is not on the recorded deed, so off-market comps are harder to source here and the appraisal carries more of the load. That matters most on a cash-out refinance of a seasoned pool. Tell us about the portfolio and we will tell you what the file needs.

Five or more properties. Below that we would write them individually. At five and up, a blanket or portfolio structure collapses the file into a single consolidated payment, which is the practical reason most Texas holders move to it. Terms are custom, sized to the portfolio rather than read off a rate sheet. Subject to underwriting.

$500,000 and up. That is the whole facility, not a per-property minimum, so a group of modest Texas rentals clears it easily once you are at five or more doors. Statewide average apartment rent was $1,452 as of July 2026 and concessions are widespread, so size the request off effective rent rather than asking rent. Subject to underwriting.

Yes. Individual property release is part of the structure. You can sell or refinance a single Texas asset out of the blanket without unwinding the whole loan, which is what makes a portfolio spread across several Texas metros workable rather than rigid. Release terms are set with the rest of the custom term at closing, so raise it before you sign, not once you have a contract in hand. Subject to underwriting.