You can do either a HELOC or a closed-end cash out loan in Texas. However, if this is their Texas homestead (i.e., they reside there or it is the only property that they own in Texas regardless of residency), then it will be a Texas Home Equity loan which has a great number of specific State laws and requirements. If you don't normally lend in Texas, you need to get a Texas attorney involved that is familiar with the rules and documentation requirements for a TX HE loan.
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