Let’s talk about how trust income can help you qualify for a mortgage—especially if you’re in Texas or the Dallas area. While it might sound like something only for high-net-worth families, trust income is a legitimate and sometimes underutilized qualifying source for home loans.
We sat down with Krystal Miles, one of our incredible underwriters, to break it all down. Whether you already have a revocable trust or are considering setting one up, here’s what you need to know.
What Is a Trust and Why Does It Matter for Mortgages?
A trust is a legal entity that holds and manages your assets—like your house, investment accounts, or cash. It’s most commonly used for estate planning and helps keep your affairs private and out of probate court.
There are two main types:
- Revocable Trust: You retain control and can add or remove assets.
- Irrevocable Trust: You give up control—so it can’t be used to close a mortgage.
For Texas mortgage loans, lenders require a revocable trust to close your loan in the name of the trust. This gives you (and us) flexibility and control over the property.
Qualifying for a Mortgage With Trust Income in Texas
Trust income is an approved source of income for most conventional mortgage programs, and often works for Texas borrowers using FHA, VA, and USDA loans too. But there are some important guidelines to follow.
Basic Requirements for Trust Income
- The trust must be established for at least 12 months
- You must have received consistent monthly payments
- Documentation must verify the amount, frequency, and duration of future payments
Exception for Inherited Trusts
If you’re not the grantor (creator) of the trust—like in the case of an inherited trust—you may not need the 12-month history. Instead:
- You only need to show one received payment
- Verification from the trust administrator must show expected future income
Fixed vs Variable Trust Income
Trust income is either fixed or variable, and how it’s treated depends on that consistency.
- Fixed Payments: You’ll need to show 12 months of deposits at the same amount. Lenders will average that amount for qualifying.
- Variable Payments: You’ll need 24 months of payment history, and it must show up on your tax returns. The average of the last two years will be used.
Does This Work for All Loan Types?
These guidelines are most commonly used for conventional loans (Fannie Mae and Freddie Mac). FHA, VA, and USDA may follow similar logic, but the rules can vary.
Krystal and our team recommend treating this guidance as conventional-specific, unless you check in with us to verify.
We’ll be adding a separate breakdown soon for FHA, VA, and USDA trust income rules.
Can You Close a Loan in a Trust?
Yes, as long as it’s a revocable trust, you can close your Texas mortgage in the name of the trust.
Even better: if you don’t already have a trust, we can help you create one during the loan process. The cost ranges from $3,000 to $5,000, and it’s a great move for long-term estate planning.
Your trust can also include other assets—like your bank accounts, business holdings, or investment portfolios.
Why Revocable Matters for Texas Mortgages
Lenders require revocable trusts because you need to retain control of the asset (your home). With an irrevocable trust, you no longer control the asset, which makes it ineligible for most mortgage programs.
What If You Don’t Fit Conventional Guidelines?
If your trust income doesn’t meet the standard guidelines—maybe you’re new to receiving it or don’t have the 12–24 month history—we may be able to qualify you through a non-qualified mortgage (Non-QM) program.
These mortgage options are designed for unique income sources and situations, and our team is highly experienced in identifying the right investor or product for your needs.
Trust Income Qualification Recap
To sum it all up:
- You can qualify using fixed trust income after 12 months
- Variable trust income requires 24 months and tax return documentation
- Inherited trust income can qualify sooner
- You must use a revocable trust to close a mortgage
Trust income is most common with conventional loans, but may work with FHA, VA, and USDA
If you don’t fit in the box, we’ve got Non-QM lenders who might say yes
Need Help With a Trust or Trust Income in Texas?
Whether you’re in Dallas, Houston, Austin, or anywhere across Texas, we’re here to help you qualify confidently. If you need help setting up a trust or want to explore if your trust income can be used to qualify for a mortgage, contact the Mortgage Mark team.
When you think mortgage, think Mark.
Mark Pfeiffer
Regional Sales Manager
Loan Officer, NMLS # 729612
(972) 829-8639
MortgageMark@MortgageMark.com