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. 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 â Sen. Adam Schiff of California and New York Attorney General Letitia James â of committing mortgage fraud, though legal experts say the circumstances are less serious.
The Democrats have long been objects of Trumpâs 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. âI hope that if sheâs done something wrong, I hope that sheâs actually held accountable,â 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.
Jamesâ attorney, Abbe Lowell, urged the Trump administration to investigate Paxton instead.
âIf 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,â 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 âa transparent attemptâ by Trump âto punish a perceived political foe who is committed to holding him to account.â She added that Schiff disclosed to his lenders that he owned another home that was a principal residence and sought guidance from an attorney.
It is unlikely that Paxton, a staunch Trump ally, will face the same federal scrutiny as James and Schiff. Itâs 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 â one in suburban Dallas, two in Austin â 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 â if not more â 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,â said Jennifer E. Laurin, a professor at the University of Texas Law School in Austin.
Legal experts say it is possible that the Paxtonsâ 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 Texasâ top law enforcement officer, ought to have known better.
âIf 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,â said Arif Lawji, a veteran Texas real estate attorney. âHeâs the chief enforcement officer. You have to be accountable for stuff you do thatâs wrong.â
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 familyâs 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 Paxtonsâ family has long resided. Itâs 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. Itâs also where Ken Paxtonâs Senate campaign website until recently said he lived.
Lawji said the Paxtonsâ 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 âintentional act,â he said.
The tax break was worth several thousand dollars, a fact that confounded real estate lawyers. âWhy would you try to do all of this,â Lawji said, âwhen you are the attorney general? Thatâs a bigger question to me than the money, when you are AG and have to enforce this law.â
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 Paxtonsâ 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 â5 bedroom luxury cabinâ in Broken Bow, Oklahoma, that is for rent on Airbnb and other short-term rental sites, records show. The propertyâs 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
Paxtonâs 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 âprincipal residence.â 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 âWILL NOT be my primary residence.â
âAs Iâve said from the beginning, if prosecutors want to know that truth about Attorney General Jamesâ mortgage applications, we are ready and waiting with the facts,â said Lowell, Jamesâ 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 â a step Paxton has not taken.
Paxton has faced legal and political challenges
Paxtonâs real estate dealings are not the first time he has drawn scrutiny for his conduct while in office.
Before his election as attorney general, Paxton, then a state senator, admitted in 2014 to violating Texas securities law and paid a fine.
He spent roughly 10 years under state indictment on securities charges while serving as attorney general. The charges were eventually dropped in 2024. Other alleged misdeeds in office led to his impeachment by Texasâ GOP-controlled House in 2023. He was acquitted in a trial by the Senate.
Angela Paxton did not cast a vote in his impeachment trial and recently filed for divorce, citing Ken Paxtonâs infidelity and other ârecent discoveries.â She did not elaborate.
What ultimately unleashed the impeachment push was Paxtonâs relationship with Austin real estate developer Nate Paul, who pleaded guilty this year to one count of making a false statement to a financial institution.
In 2020, eight top aides in Paxtonâs office told the FBI they were concerned the stateâs top law enforcement official was misusing his office to help Paul over the developerâs unproven claims about an elaborate conspiracy to steal $200 million of his properties.
The House impeachment managers accused Paxton of attempting to interfere in foreclosure lawsuits and issuing legal opinions to benefit Paul. They also alleged that Paul employed a woman with whom Paxton had an affair in exchange for legal help and that the developer paid for expensive renovations to the attorney generalâs home in Austin.
That would be the same house that he declared in mortgage documents was his third primary residence.
