HELOC my house hack to buy another rental

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Hey all,

I was hoping to get a HELOC on my primary residence to use as a down payment or towards my next property. I am in Texas.

I bought a damaged house in April 2020 with hard money and refinanced into a conventional loan. I added a bedroom, renovated everything, and rented out my 3 extra rooms.

The equity has gone up quite a bit between the improvements and the hot market.

My plan is to leverage the equity to buy my next property. I owe around $225k and it will appraise for $350k. Over a year ago it appraised for $327k before I added a bedroom, so I assume the appraisal now will be even higher.

My lender told me they could only lend an amount much smaller than I was expecting. Am I missing something?

I seem to remember there is some law about HELOCs in Texas that might limit what I’m trying to do, but I can’t find it.

Has anyone else had success using a HELOC on their primary residence with numbers similar to these?