WASHINGTON — Texas Attorney General Ken Paxton and his wife, Angela, are longtime owners of a $1.5 million house in a gated community outside Dallas. In 2015, they snapped up a second home in Austin. Then another.
The problem: Mortgages signed by the Paxtons contained inaccurate statements declaring that each of those three houses was their primary residence, enabling the now-estranged couple to improperly lock in low interest rates, according to an Associated Press review of public records. The lower rates will save the Paxtons tens of thousands of dollars in payments over the life of the loan, legal experts say.
The records also revealed that the Paxtons collected an impermissible homestead tax break on two of those homes, and they have routinely flouted lending agreements on some of their other properties.
It is a federal and state crime to knowingly make false statements on mortgage documents. It’s also against the law in Texas to collect a homestead tax break on two separate properties. Violating the terms of a mortgage could allow lenders recourse to seek full payment of a loan, according to legal experts.
Mortgages have become political fodder
The mortgage revelations are likely to become fodder in the Republican primary for a U.S. Senate seat in which Paxton is seeking to topple the incumbent, John Cornyn. The situation is further complicated by the Trump administration’s criminal pursuit of Democrats over similar issues.
President Donald Trump has accused two of his political foes — Sen. Adam Schiff of California and New York Attorney General Letitia James — of committing mortgage fraud, though legal experts say the circumstances are less serious.
The Democrats have long been objects of Trump’s ire for having led various investigations into his conduct as president and as a business executive.
Paxton, himself, has weighed in on the investigation of James, saying he hoped authorities would look into her conduct. “I hope that if she’s done something wrong, I hope that she’s actually held accountable,” he told supporters last month.
The Justice Department has launched a criminal investigation of James, FBI director Kash Patel told Fox News in May. The department received a criminal referral for Schiff last week from the Federal Housing Finance Agency, its director William Pulte confirmed in a social media post.
Neither the Justice Department nor the FHFA responded to an inquiry about whether they may investigate Paxton, too.
James’ attorney, Abbe Lowell, urged the Trump administration to investigate Paxton instead.
“If this administration was genuinely interested in rooting out fraud, it appears they should stop wasting their time on the baseless and discredited allegations against the New York Attorney General James and turn their attention to Texas,” said Lowell, a prominent Washington attorney whose past clients include Hunter Biden, Ivanka Trump and Jared Kushner.
In a statement, Marisol Samayoa, a Schiff spokeswoman, blasted the criminal referral as “a transparent attempt” by Trump “to punish a perceived political foe who is committed to holding him to account.” She added that Schiff disclosed to his lenders that he owned another home that was a principal residence and sought guidance from an attorney.
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It is unlikely that Paxton, a staunch Trump ally, will face the same federal scrutiny as James and Schiff. It’s equally doubtful that Paxton will face much legal trouble in Texas: His office is one of the primary agencies tasked with investigating allegations of mortgage fraud.
Ken Paxton and his spokesman did not respond to multiple requests for comment. Angela Paxton, who is a state senator in Texas, did not respond to requests made through her office.
Three of the Paxtons’ homes are each listed as a primary residence
Documents reviewed by the AP show the Paxtons hold mortgages on three homes — one in suburban Dallas, two in Austin — that are each listed as their primary residence. The designation comes with a considerable financial upside.
Interest rates on primary homes are significantly lower than those for mortgages on secondary homes or investment properties, saving buyers tens of thousands of dollars — if not more — over the life of a loan.
Making a case against Paxton would require “establishing both that Paxton was aware of the contents of the mortgage document, and also that he was actively aware at the time that he signed it that this was not going to be a primary residence,” said Jennifer E. Laurin, a professor at the University of Texas Law School in Austin.
Legal experts say it is possible that the Paxtons’ lenders prepared the documents and that the couple did not carefully review them before signing.
Even if that were the case, some legal experts say that Paxton, as an attorney and Texas’ top law enforcement officer, ought to have known better.
“If he filled out lender documents knowing that they were false, then that is a false statement to obtain a mortgage on favorable terms. That would be actionable,” said Arif Lawji, a veteran Texas real estate attorney. “He’s the chief enforcement officer. You have to be accountable for stuff you do that’s wrong.”
Paxton collected two ‘homestead’ tax breaks
Low interest rates are not the only perk the Paxtons secured, records show. In 2018, they simultaneously collected homestead property tax breaks on their family’s home in suburban Dallas, as well as on a $1.1 million home in Austin, property records and tax statements show.
A homestead tax break is a property tax reduction that a homeowner is only eligible to collect on one property that is also their primary home.
The suburban Dallas home is where the Paxtons’ family has long resided. It’s where Ken and Angela Paxton are registered to vote. It is located in the state Senate district that Angela Paxton represents in the Legislature, which Ken Paxton held before his election in 2014 to be attorney general. It’s also where Ken Paxton’s Senate campaign website until recently said he lived.
Lawji said the Paxtons’ simultaneous collection of two homestead tax breaks appears to be a more clearcut violation. That is because one must obtain a form and submit it to taxing authorities to receive such a tax break, making it an “intentional act,” he said.
The tax break was worth several thousand dollars, a fact that confounded real estate lawyers. “Why would you try to do all of this,” Lawji said, “when you are the attorney general? That’s a bigger question to me than the money, when you are AG and have to enforce this law.”
Paxton may have violated mortgage terms by renting properties
Separately, land records indicate the Paxtons may have violated the terms of at least two mortgages on other houses they own. The mortgage on a home in College Station, Texas, says the property is for the Paxtons’ exclusive use and cannot be rented out. Doing so would be grounds for terminating the mortgage, the document states. The home has been listed for rent on real estate websites on-and-off since at least 2022.
Ken Paxton also holds a $1.2 million mortgage on a “5 bedroom luxury cabin” in Broken Bow, Oklahoma, that is for rent on Airbnb and other short-term rental sites, records show. The property’s mortgage stipulates that it cannot be rented out.
Representatives for Stifel Bank, Cornerstone Home Lending and Benchmark Mortgage, which issued the mortgages in question, did not respond to requests for comment.
Schiff and James come under fire from GOP
Paxton’s real estate dealings are in many ways distinct from those of James and Schiff, the Democrats targeted by the Trump administration.
The investigation of James centers on forms she signed in 2023 while helping a niece buy a home in Virginia. One form stated that James intended to occupy the home as her “principal residence.” But in other documents, the New York attorney general made clear she had no intention of living there. An email to the mortgage loan broker two weeks before she signed the documents stated the property “WILL NOT be my primary residence.”
“As I’ve said from the beginning, if prosecutors want to know that truth about Attorney General James’ mortgage applications, we are ready and waiting with the facts,” said Lowell, James’ attorney.
For over a decade, Schiff owned homes in Maryland and California, the state he represents, that were both designated as his primary residence. In 2020, then a congressman, Schiff designated his Maryland property as a second home — a step Paxton has not taken.
