Homesteading is unique to Texas law. It was originally enacted to help wives and children remain lawfully in their homes in the event the man of the house died. While mortgage lenders, tax collectors, or home equity lenders were and are permitted to force the sale of the home, other creditors can not.
Originally, when taking into consideration the times when the law was passed it was not uncommon for someone to step forth after the bread winner passed away and claimed the value of the property for a debt. Sometimes, these were gambling debts or other non-essential debts that could not necessarily be proven.
Homesteading applies only to the acreage of land. It does not quantify the value or the condition of the property. Provided that the land has at least 10 full acres or more, it can be considered a homestead. Usually, these homes are in or just outside of a major town.
During the early settling period most of the homes that were built throughout Texas were considered homesteads. Thus, this left most families protected from random debt claims in the event of the man’s death. Since the earliest inception of this law, it has gone through politician after politician without much change at all.
Of course, homesteading protection does not exclude lien holders and taxing agencies from foreclosing on the property. This can still happen when a debt for the home or a home improvement goes unpaid. Tax authorities tend to rule out most protective laws. For the women that lived in Texas during the settling period the law was their only chance at keeping their family thriving.
The downside is that it is very difficult to receive things like home equity loans throughout the entire state of Texas. If your property qualifies as a homestead, you are not likely to receive a home equity loan. Most lending institutions will require that you vacate the property and use it as a rental unit if you want to have an approved home equity loan. You also can not borrow more than 80 percent of the home’s value.
While homesteading laws may invoke protection rights for some families, for others it presents a unique problem. Other states do not have this law in place. This means that Texas is the one state that offers widows and her children ample protection from debt collection while making the simple act of a loan difficult to receive. Not all people support this law any longer and yet it is has been a necessary act to prevent widows from being forced from their homes regardless of the validity of the claim.