A year ago this week, Texas voters passed Proposition 16, making home equity lines of credit available to the state’s homeowners.

And since that time, most Texas homeowners with home equity line of credit accounts are using them to make home improvements (35 percent) or to consolidate bills (22 percent), according to a study commissioned by Wells Fargo to commemorate the one-year anniversary.

When asked why they chose a home equity line of credit over a home equity loan, 65 percent said they did so either because of the line of credit’s flexibility or its lower interest rate. Almost all respondents – 95 percent – said they would only use their home equity line of credit for major purchases and, if they had the choice, would never consider using it for everyday items such as gas or groceries.

A significant number of the Texas homeowners polled were unaware of some of the provisions that are unique to the state regarding home equity lines of credit. For example, about 40 percent of respondents were unaware that the maximum amount Texas homeowners can borrower under a home equity line of credit is 50 percent of the fair market value of their home or the amount of “available equity,” whichever is less. Available equity is 80 percent of the home’s value less the balance of outstanding loans such as a mortgage balance.

An independent research firm conducted the phone survey on behalf of Wells Fargo. About 500 of Wells Fargo’s Texas customers participated, all of whom currently have a home equity line of credit. Interviews were completed in August.

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Send tips or a Letter to the Editor to samantha@inman.com or call (510) 658-9252, ext. 140.

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