How Can I Use My Trust to Help Me Buy a House

Does The Types of Trust Matter?

Trusts come in a few different forms, and the type you’re working with can impact how lenders treat it.

Revocable Living Trust

A revocable living trust, often used in estate planning, is flexible. If you’re both the trustee and the beneficiary, you likely have full control over distributions. That gives lenders more confidence when evaluating your file.

Irrevocable Trust

An irrevocable trust, by contrast, cannot be altered or revoked without the beneficiary’s permission. These are typically created by a parent, grandparent, or other family member to preserve wealth, provide tax protection, or shield assets from creditors. They tend to be more rigid, with the trustee—not the beneficiary—in control of distributions. This added layer of control can raise questions during underwriting.

To get comfortable, lenders will want to see not only the trust agreement itself, but also a clear history of income distributions. A trustee letter confirming your right to receive funds and outlining the terms and expected continuation of those payments can be critical. If you can show regular deposits into your account—ideally for at least 12 to 24 months—and the trust has sufficient assets to continue distributions for another three years, that income can often be used just like employment income. The process may take a bit more documentation than with a revocable trust, but with the right paperwork, it’s absolutely doable.

Testamentary Trust

There’s also the testamentary trust, created through a will. These often come into effect after the death of a parent or grandparent and are designed to hold and distribute assets according to the terms laid out in the will. Like irrevocable trusts, testamentary trusts are generally managed by a third-party trustee and cannot be easily changed. That means the beneficiary does not control the assets directly and must rely on the trustee to authorize any distributions.

In terms of mortgage qualification, testamentary trusts share many similarities with irrevocable trusts. Lenders will want to verify that the beneficiary is receiving regular income and that the trust has enough assets to sustain those payments for at least three more years. 

Using Trust Income to Qualify for a Mortgage

Trust income can be used just like a paycheck, as long as it’s verifiable and expected to continue for at least three years. This is a common scenario for retirees, legacy wealth holders, trust fund beneficiaries, or anyone living off long-standing investment income. If your trust sends you monthly distributions—whether from dividends, interest-bearing accounts, or rental income held by the trust—lenders may treat that money as stable income for underwriting purposes.

In the eyes of most mortgage lenders, the key to using trust income effectively is documentation. Most lenders will require at least a two-year history of distributions, often supported by bank statements and tax returns. They will also want a copy of the trust agreement itself and if a third-party trustee controls the trust, a signed letter confirming the regularity and continuation of payments can help validate the income stream.

In cases where you're also the trustee, lenders may require additional proof to ensure you're not just temporarily shifting funds to qualify for a loan. Ideally, the payments should be scheduled and automatic.

The income needs to be consistent, clearly sourced, and expected to continue well into the future. Lenders prefer predictable patterns over one-off or ad hoc transfers. If your trust is paying you $8,000 a month and it has enough assets to sustain that for the next three to five years, it can be treated as qualifying income for jumbo, conventional, or even portfolio loans tailored to high-net-worth borrowers.

Example: A buyer in Austin was receiving $20,000 per month from a trust her mother had established years earlier. The funds were invested in dividend-paying stocks, and monthly distributions had been made consistently for over two years. With a trustee letter and supporting documentation, she easily secured a $1 million jumbo mortgage without needing to show traditional employment.

Using the Trust’s Value To Qualify (Asset Depletion Strategy)

Even if you’re not actively receiving income from the trust (or not receiving enough income to qualify using just the distributions), you may still be able to qualify based on its value. This method, known as asset depletion, allows lenders to convert your financial assets into usable, qualifying income for mortgage purposes—without requiring you to liquidate anything.

Instead of relying on W-2s, 1099s, or traditional employment verification, asset depletion uses a formula to estimate income based on your total liquid assets. Lenders divide the value of eligible liquid assets over a fixed term. Many lenders require that fixed term to be as high as 240 or 360 months - dramatically reducing your eligible loan amount. However, at LendFriend, we allow that term can be as short as 60 months! Making it so much easier to qualify for the loan you want.

For example, a $2 million trust divided by 60 months results in $33,333 in monthly qualifying income. That’s more than enough to qualify for a $1.5 million mortgage in many cases—even without any job or employment history. This kind of flexibility is a game-changer for high-net-worth individuals looking to buy property while keeping their investment portfolios intact.

This strategy is especially useful for high-net-worth individuals who don’t have active income but need to demonstrate their ability to repay a loan. Asset depletion loans are frequently used by retirees, trust beneficiaries, or business owners who retain earnings within their companies.

At LendFriend, we’ve helped many Texas buyers use this strategy to unlock mortgage options that fit their financial picture. You can learn more in our complete guide to asset depletion mortgages.

Example: A retired entrepreneur in Houston had $5 million in a revocable living trust and no traditional income. By applying a 240-month asset depletion model, a lender calculated $20,833 in qualifying monthly income, but by applying LendFriend calculation of 60 months, his income skyrockets to $83,333 . That's difference between a $1M loan and a $4M loan, which means his purchasing power (and his homebuying options) just grew exponentially! 

Combining Income and Assets

In many cases, the strongest mortgage applications use a combination of both strategies: trust income and asset depletion. But combining trust assets with traditional employment income can be just as powerful. If one spouse has a high-paying job and the other holds substantial assets in a trust, the two can be blended to create a strong, flexible loan profile.

This hybrid approach is especially beneficial for buyers applying for jumbo mortgages, or for those purchasing homes in any market. Using both trust assets and income allows borrowers to qualify for larger loan amounts, meet reserve requirements more easily, and reduce overall risk in the eyes of underwriters.

Example: A couple buying a $2.4 million home in Highland Park took advantage of this blended strategy. One spouse earned $12,000 per month in W-2 income, while the other had access to a $4.6 million revocable trust. The mortgage broker used the earned income for primary qualification and the trust’s value as supplemental strength to cover reserves and enhance approval confidence. With both income and assets working in their favor, the couple secured financing quickly—and closed in under three weeks.

Frequently Asked Questions

Can I use my trust to buy a house if I don’t have a job?
Yes. If you receive recurring income from the trust or have access to its principal, you may qualify based on income or asset depletion guidelines. Some borrowers even qualify for non-traditional income mortgage programs designed for trust beneficiaries or retirees.

What documents will I need to provide?
Lenders will ask for the trust agreement, a history of distributions, bank statements showing deposits, and possibly a trustee letter confirming access or intent to continue payments.

Can I use trust assets for the down payment?
Yes. But if you’re also using those same funds to qualify based on asset depletion, the lender may adjust the usable amount to avoid double-counting.

Does it matter if I’m also the trustee?
Not necessarily, but if you are, the lender may require additional documentation or third-party verification to ensure the assets are truly available to you.

What are the Next Steps?

If you’ve inherited wealth, manage a trust fund, or are living off passive income, you don’t have to buy a home outright using the trust. Instead you can let those assets continue compounding in value while leveraging the trust to buy a house with a mortgage. Whether you’re receiving trust distributions or relying on asset-based underwriting, there are flexible, compliant, and strategic ways to qualify for a mortgage—without giving up control of your assets. 

LendFriend specializes in helping Texas homebuyers navigate these more complex financial situations. If you’re a trust beneficiary looking to purchase a home in Austin, Houston, Dallas, or anywhere in between, we’re ready to help you structure a smart, stress-free path to homeownership. Schedule a call with me today or get in touch with me by completing this quick form, and discover how working with the right team can make all the difference.