FINANCIAL EDUCATION | Using your equity
Unlocking Equity in 2026: A Strategic Guide to HELOCs and ILOCs for Texas Real Estate Investors
Published April 7, 2026
Key Takeaways
- Many homeowners now have significant equity, creating opportunities to access funds without selling their properties.
- A HELOC allows homeowners to borrow against their primary residence with flexible, interest-only payments during the draw period.
- An ILOC lets investors leverage rental property equity to fund acquisitions, renovations or portfolio growth.
Over the last several years, Texas real estate has experienced one of the most dynamic market cycles in recent memory. Beginning in 2020, home prices rose at a record pace during and immediately following the pandemic, driven by a combination of low interest rates, rapid population increases and strong demand. By summer 2022, according to a recent report conducted by the Texas Real Estate Research Center at Texas A&M University, Texas home prices reached $360,000, a 34% increase from the median home price of $269,000 in 2020.
Today, the median home price in Texas is around $330,000. In Dallas-Fort Worth (D-FW) specifically, the median price for a single-family home is approximately $375,000, a nearly 6% decrease from $398,000 in 2024, a shift that has improved affordability for buyers.
This combination of elevated yet stabilizing home prices and D-FW’s consistent ranking as one of the fastest-growing metro areas in the country, thereby reinforcing long-term housing demand, presents Texas property owners and investors with a unique opportunity to grow their portfolios without selling existing properties by strategically using equity through tools like a home equity line of credit (HELOC) and an investment line of credit (ILOC).
This guide explains how these tools work, how they fit within Texas regulations and how investors can use them to grow portfolios in today’s market environment.
A Quick Refresher on HELOCs and How They Work
A home equity line of credit (HELOC) is a revolving line of credit secured by the equity in your primary residence. Rather than receiving a lump sum, you are approved for a maximum credit limit (usually up to 80% of your equity, which is your home’s market value minus your remaining mortgage balance). Once approved, you can access funds as needed (every draw must be a minimum of $4,000 by Texas state law) during a defined draw period (typically between five and 10 years). During the draw period, you only pay interest on the funds you draw. Once the draw period ends, the repayment phase begins, meaning you can no longer draw funds and you must start paying back the principal loan, with interest.
For a more detailed look at HELOCs and how they work, visit our in-depth guide here: How Does a Home Equity Line of Credit Work?
Using HELOCs in Texas: What Investors Should Know in Today’s Market
Because Texas home values increased significantly between 2020 and 2022, many homeowners built substantial equity. Even with price moderation in 2024 and 2025, property values in much of the state remain well above pre-pandemic levels.
This means many Texas homeowners now have access to meaningful equity that can be used strategically to save money on utilities and boost the value of their current home through energy-efficient upgrades or expand their real estate portfolio with a down payment on a second house, vacation home or rental property. Additionally, HELOCs can be a great option to consolidate debts or pay for education-related expenses, like college tuition, especially since some HELOCs could have lower interest rates than other forms of credit. HELOCs can also be a great way to invest in business, since using a HELOC to add seed money or provide funds to a business means you don’t need to meet the same qualifications as a business loan.
What Is an Investment Line of Credit (ILOC) and How Does It Work?
Unlike a HELOC, an investment line of credit (ILOC) is a revolving line of credit secured by rental property equity rather than a primary residence, designed specifically for investment-related purposes such as acquisitions or renovations.
One of the primary benefits of an ILOC is that it allows you to leverage the assets in your portfolio to meet cash needs without selling them, meaning you can let your money continue to work for you while still maintaining liquidity to support a range of supplemental investment activities, like acquisition, renovation or debt reshuffling.
At-a-Glance Comparison: HELOCs vs. ILOCs
| Feature | HELOC (Home Equity Line of Credit) | ILOC (Investment Property Line of Credit) |
|---|---|---|
| Typical Interest Structure | Variable | Variable |
| Typical Rate Range (based on market conditions and borrower profiles) | Often slightly lower than ILOC due to the consumer protection structure | Mid-to-high single digits to low double digits (depending on lender and risk profile) |
| Collateral | Primary residence | Investment property or portfolio |
| Draw Structure | Revolving line | Revolving line |
| Repayment Structure | Interest-only during draw; amortized repayment period | Interest-only during draw; principal later |
| Term Length | Longer, typically 10-year draw period and 10- or 20-year repayment period | Shorter, typically between 1–5 years |
| Speed of Access | Moderate | Moderate |
| Best for | Supplemental liquidity and down payments |
Portfolio growth, recurring renovations and acquisition flexibility |
| Risk Profile | Primary home at risk | Investment performance dependent |
Bottom Line for Texas Real Estate Investors
When done properly, leveraging your equity, whether it’s through a HELOC or an ILOC, can accelerate portfolio growth without disrupting long-term financing foundations.
However, choosing the right lending partner matters. At Credit Union of Texas, our deep understanding of Texas home equity regulations, local market insight across D-FW and surrounding communities, efficient processing timelines when timing is critical, competitive home equity solutions tailored to member needs and education-focused guidance that supports long-term financial strength are key in helping Texas property owners evaluate how to use equity strategically in 2026 and beyond.
If you’re considering how a HELOC, ILOC or other home equity solution could support your investment strategy in today’s Texas market, explore your options or connect with a CUTX specialist to discuss your goals. You can speak to a CUTX equity expert by calling us at 972-705-4845.