Most residential real estate transactions in Texas involve a Texas homestead. A homestead may be “urban” or “rural” and an urban homestead may be “residential” or “business.”
An “urban” homestead may consist of not more than ten acres of land, together with any improvements. It must be used as an urban residence or both as an urban residence and a place to exercise a calling or business in the same urban area. The property must be in one or more contiguous lots. A business homestead must be in a lot that is contiguous to the residential homestead in order to be claimed as part of the homestead.
A homestead is “rural” if at the time it is pledged the property is (i) located within a municipality or its extra territorial jurisdiction or a plotted subdivision and (ii) not served by municipal utilities and fire and police protection. A rural homestead for a (i) family is not more than 200 acres which may be in one or more parcels with improvements and (ii) single adult is not more than 100 acres which may be in one or more parcels with improvements.
If a manufactured home is permanently affixed to real property it can be a person’s homestead and can secure a home equity loan.