The Quick Read: Yes, in most cases, as long as the trust and the property meet Freddie Mac’s conditions. The file turns on three things: whether the trust is revocable and set up the right way, whether title is vested in the trustee, and whether the cash-out seasoning tests are met. Lender overlays can be stricter than the agency rules, and Freddie Mac’s guide does not say outright that cash-outs are allowed in a trust. The answer comes from combining its trust-borrower section with its cash-out product page.
- The trust creator, called the settlor, is the person underwritten on income, assets and credit.
- Irrevocable trusts are generally not eligible, and the trust wording matters more than most borrowers expect.
- Cash-out seasoning still applies: the first mortgage being paid off must be at least 12 months old, and the borrower must be on title for 6 months, with exceptions.
- The agency the lender sells to, plus that lender’s own overlays, decides the final conditions.
What Counts as a Cash-Out Refinance?
A cash-out refinance replaces your current first mortgage with a new, larger one and hands you the difference in cash. A rate-and-term refinance, sometimes called limited cash-out, only pays off the existing first mortgage, closing costs and any purchase-money second lien, with just incidental cash back.
Cash-out refinance estimate
The starting figures are an example value with a balance and a cash request in proportion. Replace them with yours.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the agency cap on a one-unit principal residence, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a cash-out refinance quote; a cash-out loan is priced by the lender at lock. The cash available is the loan the program cap allows less the balances paid off, before closing costs, which are not included. The HELOC line is the program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages.
Why does that matter for a trust? Because the trust rules and the cash-out rules are separate tests. Passing one doesn’t pass the other.
For a conventional loan through the wholesale programs Lendmire works with, a cash-out on a one-unit principal residence typically reaches 80% loan-to-value. Two- to four-unit principal residences, second homes and investment properties typically top out at 75%. Those caps are subject to lender guidelines and the full file. If you want the broader picture of what equity each option can reach, Lendmire’s cash-out refinance programs page lays out the lanes.
Across the wholesale programs placed through Lendmire, there is also a lane that reaches 89.99% loan-to-value with no mortgage insurance. It requires a 680 score, a 50% total ratio, a thirty-year fixed rate, a primary residence and a conforming balance, and it carries its own six months of seasoning. A trust-held file would have to fit that lane’s own conditions, and lender review decides. Exact terms depend on lender guidelines, credit profile, reserves, and property review.
Which Trusts Qualify?
An eligible trust is a living trust, usually a revocable one, where the settlor is the primary beneficiary and at least one trustee is a settlor. Irrevocable trusts are generally not eligible. Lenders also confirm the trustee has the power to borrow.
Here is how common trust types usually look to a lender, framed qualitatively:
| Trust type | What to expect |
|---|---|
| Revocable living trust | Generally eligible if conditions are met |
| Revocable, becomes irrevocable at death | Usually fine while the settlor is living |
| Irrevocable trust | Generally not eligible |
| Land trust | Not covered by the living-trust rules; ask the lender |
A revocable trust, in Fannie Mae’s wording, is one an individual creates during their lifetime and can change or cancel at any time. Fannie Mae’s revocable trust section of its Selling Guide says the same thing. Fannie accepts only individuals as credit-qualifying borrowers, with an exception for these trusts.
Under Freddie Mac’s living trust section, the key conditions are these:
- The settlor, or each settlor if there are several, is the trust’s primary beneficiary.
- At least one trustee is a settlor. A settlor plus co-trustees is fine.
- A financial institution that customarily performs trust functions may serve as co-trustee.
- The trustee is specifically authorized to borrow for the benefit of an underwritten settlor.
- The lender warrants the trust meets Freddie’s revocability and other requirements at delivery and funding.
If your trust names a family member as the only trustee, or the borrowing power is missing, expect questions. Fixing trust wording is often possible, but it is a job for your estate attorney, not your loan officer.
Who Gets Underwritten, and Who Signs?
The settlor is underwritten. The trust is the borrower of record, but your income, assets and credit decide the loan. Freddie’s term for this is the “underwritten settlor.” Fannie says it directly: underwriting rests on the individual.
That clears up a common misconception. The trust does not “qualify” for the loan; you do.
Here is the usual order of steps on a trust-held cash-out:
1. The lender reviews your income, assets and credit as the underwritten settlor.
2. The lender reviews the trust: revocability, beneficiary, trustee mix and borrowing authority.
3. Title is checked. Freddie requires title vested in the trustee or trustees.
4. A new appraisal and inspection report are ordered. Freddie’s cash-out page requires them.
5. Each trustee signs the security instrument as trustee. Fannie’s signature block format reads like “…, as Trustee of the Trust name Trust.”
Documents typically include a certification or abstract of the trust, the full trust agreement if the lender asks, and the deed into the trust. Freddie’s trust section has its own “Mortgage file” and “Required signatures” subsections, and your lender works from those. Lists vary by lender, so ask for yours early.
Title insurance is the quiet gatekeeper. Fannie requires the lender to confirm that title insurers will give full coverage with no exceptions for the trust or trustees. If the title company balks, the loan stalls, regardless of how clean your credit is.
How Does Seasoning Work When a Trust Holds Title?
Two clocks run on a cash-out: how long the borrower has been on title, and how old the loan being paid off is. A trust doesn’t switch either one off.
| Test | The basic rule |
|---|---|
| Time on title | Borrower on title at least 6 months before the note date |
| Age of first mortgage | At least 12 months, note date to note date |
Freddie’s cash-out page sets the six-month title requirement and carves out inherited property, which has no seasoning requirement. The 12-month rule for the first lien being paid off came from a Freddie bulletin. It has exceptions for co-owner buyouts and for paying off a home equity line. Verify the current wording with your lender, since agency rules are updated.
Here’s where trusts get murky. Freddie’s guide speaks explicitly to time held by an LLC toward the title clock. It does not say the same for a trust, so the lender or underwriter interprets. Some lenders count your time in the trust as your time. Others want more. For its part, Fannie Mae’s cash-out section allows that a borrower may have initially purchased the property as an eligible revocable trust where the borrower is both creator and beneficiary.
So what do you do when the guide is silent? Three practical moves:
- Ask the lender in writing how they treat trust time toward the six-month test, before you pay for an appraisal.
- Check the date the deed went into the trust, and whether you were on title individually before that.
- If the answer is unclear, compare lenders. Two lenders can read the same silence differently.
Should You Move the Home Into a Trust First?
Moving a home into your trust shortly before a cash-out is where seasoning questions get sharp. Because the guide doesn’t clearly say how trust transfers affect the title clock, a fresh deed into the trust can raise a question that an older, settled transfer wouldn’t.
The reverse comes up too. Some borrowers deed the home out of the trust before closing, then back in afterward. Some lenders accept that path. It isn’t clearly required, and it carries its own risk: deeding a home out of the trust can disturb an estate plan, and title and insurance coverage can change in the process. Talk to an estate attorney first. Trusts are a common estate planning tool, and Fannie’s exception exists for that reason.
You usually don’t need to take the home out. Both agencies have trust-borrower provisions. Leaving it in is often the cleaner path.
What Are the Exceptions?
Three exceptions matter most, and each has a trust twist:
- Inheritance. Freddie has no seasoning requirement for eligible inherited properties. If a trust received the home through inheritance, ask how the lender documents it.
- Delayed financing. A borrower who bought with cash can cash out sooner under that exception. The documents proving the cash purchase matter, and a trust as the buyer adds a layer to explain.
- Co-owner buyout. The 12-month first-lien test has a special-purpose exception for buying out a co-owner. Where a trust holds the home, the buyout paperwork gets more detailed.
A Worked Example With No Dollar Figures
Picture a married couple who both created a revocable trust and named themselves co-trustees and primary beneficiaries. They live in the home as a one-unit primary residence and want cash for a renovation.
Here is how the lender sees it. The trust looks eligible: both settlors are beneficiaries and trustees, and the trust authorizes borrowing. The couple’s income, assets and credit are underwritten, because they are the underwritten settlors. Title is vested in them as trustees. The deed went into the trust years ago, so the six-month title test is not close to an issue, and their existing first mortgage is well past 12 months old.
On a one-unit primary residence, they could request up to 80% loan-to-value, subject to lender guidelines and appraisal. Both sign as trustees. The new loan pays off the old first mortgage, and the remainder comes to them as cash.
Now change one fact. Suppose the deed into the trust happened a few weeks ago, and the home was bought two months earlier. The title clock now becomes the real question, and the lender’s interpretation of trust time decides the file.
Where Lenders Differ From the Agency Rules
Whichever agency the lender sells the loan to decides which conditions apply. Lender overlays, meaning a lender’s own added rules, can be stricter on top of that. Some lenders set a higher credit floor, a lower leverage cap or a longer wait than the agency requires. Others refuse certain trust structures that the agency would allow.
Across the wholesale programs Lendmire places files with, the conventional lanes start at a 620 decision score, with the automated finding governing most files and a 50% total ratio ceiling. Those are the baseline. A trust-held file still gets the same full review, and trust paperwork adds steps rather than removing any.
Expect extra review time and possibly extra cost for trust documents, title endorsements and trustee signatures. Both vary by lender, title company and state.
Your monthly budget changes too. A cash-out replaces your current first mortgage with a new, larger balance. The payment depends on the new balance, the term and the pricing, which is worth comparing on your Loan Estimate.
Common Misconceptions
- “The trust qualifies for the loan.” The individual settlor qualifies.
- “Any trust works.” Revocability is required, and the lender warrants it.
- “I must remove the home from the trust.” Not necessarily.
- “A trust waives seasoning.” The six-month title test and the 12-month first-lien test can still apply, with inheritance as the named exception on Freddie’s cash-out page.
- “A trust is the same as an LLC.” Freddie’s guide has explicit LLC and LP rules, and its Cash-Released XChange sale channel lists living trusts as available among non-individual borrowers, which is a different treatment from other entities.
Key Terms Defined
- Settlor: the person who creates the trust and puts assets into it.
- Underwritten settlor: the trust creator whose income, assets and credit the program reviews.
- Revocable trust: a trust you can change or cancel at any time during your life.
- Vesting: how title to the property is held, here in the name of the trustee or trustees.
- Seasoning: the minimum time you have held the home or the loan being paid off.
- Overlay: a lender’s own rule that is stricter than the agency’s.
What to Ask Your Lender
- Does your trust meet the revocable, beneficiary and trustee conditions?
- How does the lender count trust time toward the six-month title test?
- Does the title company give full coverage with no trust exceptions?
- Which documents do you need, and in what form?
- Does the lender add any overlay on trust-held files?
- What happens if a trustee is not a borrower?
Run through that list before you order an appraisal. It saves surprises.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches.
Frequently Asked Questions
Do I need to remove my home from the trust to get a cash-out refinance?
Usually not. Both agencies have trust-borrower provisions, and deeding out can disturb your estate plan, so talk to an estate attorney first.
Is an irrevocable trust allowed?
Generally no. Freddie’s rules turn on a living trust that the settlor can revoke, and the lender warrants revocability at delivery and funding. Lender summaries of Freddie’s rules list irrevocable trusts as ineligible. Confirm against the Guide and with your lender before assuming either way.
Does time in a trust count toward the six-month title requirement?
It depends on the lender’s reading. Fannie Mae allows that a borrower may have purchased the property as an eligible revocable trust where the borrower is creator and beneficiary. Ask in writing before you proceed.
Does this work for a second home or investment property?
Freddie’s trust section allows primary, second home and investment occupancy, with the settlor occupying a primary residence or second home. Leverage differs by occupancy: on the wholesale conventional programs a cash-out typically reaches 80% on a one-unit principal residence and 75% on the others, subject to lender guidelines.
Who actually qualifies for the loan, the trust or me?
You do. The settlor is underwritten on income, assets and credit, and the trust is the borrower of record. Everything about your credit, ratios and equity still applies, and every figure is subject to full file review. Nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see conventional loan programs.
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References
1. Fannie Mae Selling Guide B2-2-05, Inter Vivos Revocable Trusts
2. Freddie Mac Seller/Servicer Guide 5103.5, Living Trust
3. Freddie Mac Cash-out Refinance product page
4. Fannie Mae Selling Guide E-2-04, Signature Requirements
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does Freddie Mac Set a Seasoning Period for Cash-Out Refinance? · Freddie Mac Cash-Out Refinance vs HELOC for a Primary Home · Does Fannie Mae Allow a Cash-Out Refinance on an All-Cash Home?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.