On November 8, 2005, voters in Texas approved a constitutional amendment that would allow lines of credit to be extended in reverse mortgages. The constitution previously allowed reverse mortgage loans to be secured by homestead property but did not provide for lines of credit.

Much uncertainty remains, however, especially concerning the entire regular home equity lending environment in the state. That's mostly thanks to a recent court ruling invalidating many of the state's regulations on home equity lending. At issue are questions concerning long-established parameters for making home equity loans, including whether "points" must be included in the existing three percent constitutional cap on fees.

Additional court action on the regulations is anticipated—perhaps even as early as December 2005. Until the existing regulation issue is clarified, or until new rules are in place, the parameters for offering reverse mortgage lines of credit remain unclear.