Texas Wrote the Divorce Buyout Into Its Constitution, and It Does Not Split Fifty-Fifty
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
We are a lender, not a law firm. Texas has a mechanism for this transaction that most states do not, and a division rule that surprises people who have read about California.
★★★ Texas put the divorce buyout in its constitution
Texas protects a homestead from forced sale for almost every debt. The exceptions are a short, closed list in Tex. Const. art. XVI § 50, and item (3) is this:
"an owelty of partition imposed against the entirety of the property by a court order or by a written agreement of the parties to the partition, including a debt of one spouse in favor of the other spouse resulting from a division or an award of a family homestead in a divorce proceeding"
★★★ Read that last clause again. The Texas Constitution names divorce, and names the exact debt a buyout creates. Very few states have anything like it. What an owelty lien is and how it is created.
★★★ And it is not the subsection everyone has heard of
Texas is famous for restrictive home-equity rules: an 80 percent loan-to-value ceiling, a two percent fee cap, court-order-only foreclosure. Those live in § 50(a)(6).
★★★ The owelty is § 50(a)(3): a different limb of the same list. The constitution's own drafting keeps them apart, and § 50(a)(6)(K) even says a home-equity loan must be the only homestead debt "unless the other debt was made for a purpose described by Subsections (a)(1)-(a)(5)", which is where the owelty sits.
★★ That structural separation is why Texas family lawyers reach for owelty in a buyout. ★ How a particular owelty is documented and closed is a question for your attorney and the title company, not for us, and not for a website. The two subsections side by side.
★★★ Texas does not divide fifty-fifty
People arrive certain that community property means a 50/50 split. In California that is close to right. In Texas it is not what the statute says. Tex. Fam. Code § 7.001:
"the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage"
★★★ Just and right, not equally. For comparison, California's Family Code § 2550 directs the court to "divide the community estate of the parties equally". Two community-property states, opposite defaults. What that changes about planning a buyout.
★★ A second Texas difference in the same area: Tex. Fam. Code § 3.003 presumes property to be community and sets the burden for proving separate property at clear and convincing evidence: a standard of proof, where California uses a documentary test. The community-property sections.
★★ The homestead exemption is bigger than it was
The school-district residence homestead exemption is $140,000, following the constitutional amendment Texas voters approved in November 2025. The Texas Comptroller of Public Accounts gives the worked example: a home appraised at $300,000 with the exemption pays school taxes "as if it was worth only $160,000."
★ Any taxing unit may add a local option of up to 20 percent of appraised value, with a $5,000 floor. The figures, and the stale source that nearly caught us.
★★★ And the part no lead-generation site wants to tell you
Austin -4.7%. Dallas -2.3%. Houston -1.9%. San Antonio -1.9%. All four of the big Texas metros declined over the year to August 2026, and that is where most Texas divorces happen.
★★★ In a buyout the equity being divided is set by an appraisal ordered months after the number was agreed. In a falling metro that is where agreed figures come apart. All the metros, and what it means for a settlement.
★ The other half of Texas rose. Abilene +8.8%. Of 67 Texas metros, 38 rose and 29 fell. This is not a statewide collapse; it is a split, with the big cities on the wrong side of it.
★ One loan limit, 254 counties
Every Texas county sits at $832,750 and Texas has no high-cost county, despite having more counties than any other state. Why that is the opposite of California.
★ What we are and what we are not
We are a lender. We are not a law firm, we do not represent anyone in a dissolution, we make no attorney referrals, we take no position on how property should be divided, and we do not advise on how an owelty should be documented. We publish the constitutional and statutory text so the financing half of your settlement rests on something checkable.
Mike Certo, NMLS #260555. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
What is an owelty lien in Texas?
An owelty of partition is one of the debts the Texas Constitution excepts from homestead protection. Article XVI section 50(a)(3) covers an owelty imposed against the entirety of the property by a court order or by a written agreement of the parties, including a debt of one spouse in favor of the other spouse resulting from a division or an award of a family homestead in a divorce proceeding.Does Texas split property 50/50 in a divorce?
No. Texas Family Code section 7.001 requires the court to divide the estate of the parties in a manner the court deems just and right, having due regard for the rights of each party and any children of the marriage. California by contrast requires an equal division under its Family Code section 2550.Is an owelty lien the same as a Texas home equity loan?
They are different subsections of the same constitutional list. The owelty is article XVI section 50(a)(3). The home-equity extension of credit is section 50(a)(6), which carries an 80 percent loan-to-value cap and a two percent fee cap. Section 50(a)(6)(K) expressly tolerates other homestead debt made for an (a)(1) to (a)(5) purpose, which includes the owelty.How much is the Texas homestead exemption?
The school-district residence homestead exemption is $140,000 following the constitutional amendment approved by Texas voters in November 2025. The Comptroller's example is that a home appraised at $300,000 with the exemption pays school taxes as if it were worth $160,000.Are Texas home values falling?
In the big metros, yes. Over the year to August 2026 Austin fell 4.7 percent, Dallas 2.3 percent, Houston 1.9 percent and San Antonio 1.9 percent. Across all sixty-seven Texas metros, thirty-eight rose and twenty-nine fell, so it is a split market rather than a statewide decline.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about mortgage financing during and after a divorce. Not a loan commitment, and not legal, tax or financial advice. Cornerstone First Mortgage is a lender; it is not a law firm, does not represent any party to a dissolution, does not make attorney referrals, takes no position on how property should be divided, and does not advise on how an owelty of partition should be documented or closed. Texas homestead and property-division rules are set by the Texas Constitution and the Family Code and applied by the courts; homestead tax exemptions are administered by county appraisal districts. Agency requirements described here are Fannie Mae Selling Guide provisions current as of the date shown and are subject to change and to lender overlays. Housing market figures describe the twelve months to August 2026 and are not a forecast. All loans are subject to borrower, property and program qualification.