The Quick Read: Usually yes, but a beneficiary qualifies as a person, and the trustee must separately authorize any lien on trust property, so the trust document, the trustee and the lender all have to line up. Michigan law gives a trustee default powers to mortgage trust property, subject to the trust instrument. The beneficiary’s own credit, assets and income still carry the file.
- The trustee holds legal title and signs the mortgage; a beneficiary alone cannot pledge trust property.
- A certificate of trust usually proves trustee authority without handing over the full trust.
- Revocable trusts are the easy case; irrevocable trusts are harder and more specialized.
- For a cash-heavy beneficiary, qualifying on assets rather than income is often the cleanest path, subject to underwriting.
Who Actually Qualifies: The Trust, the Trustee or the Beneficiary?
A person qualifies. A trust is a legal arrangement, not a borrower with a paycheck. Across the wholesale network Lendmire works with, the file is built around a real individual’s credit, assets and documents, and the trust is a vesting and authority question layered on top.
Three parties matter. The trustee holds legal title and signs the mortgage. The beneficiary holds the economic interest. The lender reviews both the borrower and the collateral. When one person wears two hats, as a beneficiary who is also the trustee of a revocable trust, the file is simple. When the roles split, someone else has to sign.
What Michigan Law Lets a Trustee Do
Michigan’s Trust Code gives a trustee default powers to mortgage or pledge trust property, including beyond the trust’s term. It also allows a trustee to lend trust money to a beneficiary and to pledge trust property to guarantee a beneficiary’s loans. Those powers are defaults. Whether this trustee has them depends on what the trust instrument says.
So the first read is the document. Look for language on borrowing, encumbering real property, and whether the trustee can act without court approval or co-beneficiary consent. If the trust is silent or restrictive, that is the moment to bring in an attorney, before any loan application.
Which Situation Are You In?
Most confusion comes from mixing up five different setups. Each runs differently.
| Scenario | Who borrows | What decides it |
|---|---|---|
| Revocable trust, you are trustee | You, with title in the trust | Program accepts trust vesting |
| Successor trustee after a death | Beneficiary, after authority is proven | Trustee authority, then title |
| Beneficiary buys property from the trust | Beneficiary | Title moves to your name first |
| Trust assets used to qualify | Beneficiary | Account ownership and access |
| Irrevocable trust holds the property | Varies | Specialized lenders only |
Revocable vs. Irrevocable: Why the Type Matters
Revocable trusts are the easy case. The creator keeps control, so lenders can look through the trust to the person. Across most programs we place files with, a revocable trust is acceptable vesting for the right loan type.
Irrevocable trusts are different. Control has shifted away from the grantor, which raises repayment and enforceability questions. The Commonwealth Group notes that irrevocable trusts are generally not acceptable for standard residential mortgages. Expect a narrower set of options.
For contrast only, the Fannie Mae Selling Guide requires an agency-eligible revocable trust to be created by natural persons who are its primary beneficiaries, with a trustee empowered to mortgage. Those are agency rules. They do not govern the asset-based programs described below.
Proving the Trustee Can Sign
Lenders and title companies want proof that the trustee has authority. In Michigan, MCL 700.7913 allows a trustee to give a certificate of trust instead of the whole instrument. The certificate is an affidavit. It names the trust and its date, lists each current trustee, states the trustee’s relevant powers, and confirms the trust has not been revoked or amended in a way that makes it wrong. It does not need to reveal who gets what.
A recipient may ask for excerpts that name the trustee and grant power for the transaction. Justia’s statute text also says a person who demands the full instrument without a legal requirement can face liability for damages and fees. Practice still varies. Some lenders and title companies ask for more, so build in time to negotiate that early.
Qualifying on Assets Instead of Income
Many trust beneficiaries are cash-rich and income-light: a retiree, an heir, someone who just received a distribution. For that profile, asset-based mortgage programs may fit, through select programs and subject to underwriting. This is a consumer mortgage for a principal residence or second home, with investment property allowed only on the depletion path. You qualify on one path at a time.
Asset qualifier path. Eligible assets must equal or exceed the entire loan amount, and no employment or income is documented. The assets are still documented, but there is no traditional personal-income documentation, such as pay stubs or employment verification. Typically, brokerage, CD, money market and savings balances count at 100%, and retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Leverage runs up to 80% on a purchase and 75% on a refinance, with loans up to $4,000,000. The score floor is 600. Seasoning is 60 days with two months of statements per account.
An illustration, with the lender’s own calculation governing: an $800,000 loan with $330,000 in brokerage accounts (100%, or $330,000), $300,000 in a 401(k) for a borrower under 59½ (90%, or $270,000) and $200,000 in savings (100%, or $200,000) counts $800,000 of usable assets and is reviewed on assets alone.
Asset depletion path. Usable assets are divided by 60 months to create qualifying income, which then runs through the debt-to-income test. Haircuts are steeper: cash and CDs at 100%, securities 80%, private stock 75%, retirement accounts 70%, real-estate equity 60%. Loans run $125,000 to $3,500,000. Leverage on a principal residence or second home is up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out. An investment property is capped at 65% on a purchase or rate-and-term and 60% on a cash-out. Credit follows the lender’s matrix, and a first-time investor needs 700. Statements must be at least 120 days old, plus one within 45 days. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when depletion is the only income source.
An illustration: $1,500,000 in securities (80%, or $1,200,000) plus $300,000 in cash (100%) is $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income, which must carry the housing payment and other debts.
One trust-specific point: assets must be yours and accessible. Money sitting inside a trust you cannot withdraw from may not count as your asset. Inherited funds are treated more flexibly on the depletion path, where inheritance funds are excused from the statement-age seasoning.
Trust Distributions as Income
Distributions can sometimes be documented as income, but lenders look for history, documentation and continuance. Fixed, ongoing distributions read better than discretionary ones. If a trustee can stop payments at will, expect that income to be weighed lightly or ignored. When distributions fall short, asset-based qualification is the usual alternative.
Edge Cases That Trip Files Up
The beneficiary is not the trustee. A beneficiary can start the process, but the successor trustee must approve and sign. No signature, no lien.
The creator has died and the trust is now irrevocable. Borrowing against the property then calls for a specialist lender. In practice, many beneficiaries wait until title moves into their name, then use a normal loan.
Multiple beneficiaries. A sibling buyout adds valuation, consent and equalization steps. The sequence is usually: agree on value, document the buyout, finance it, move title, then refinance if needed.
Land trusts. Acceptance is program-specific. Agency practice uses a collateral assignment of beneficial interest, per a Freddie Mac guideline summary, but that is contrast only.
Transferring a mortgaged property into a trust. A federal due-on-sale exemption, 12 U.S.C. § 1701j-3(d)(8), covers certain transfers into an inter vivos trust where the borrower stays a beneficiary. Johnson Legal quotes the text, which applies to residential property of fewer than five units. It is built around owner-occupied homes, so a rental investor should not assume it protects an investment property. It does not cover LLC transfers. Retitling too early can also disturb seasoning, so check with counsel and the servicer first.
Where Investors Get It Wrong
- Assuming the trust gets approved. Underwriting looks at the person.
- Assuming beneficiaries can pledge trust property. Only the trustee can, within granted powers.
- Assuming the full trust must be handed over. Michigan favors the certificate of trust.
- Treating irrevocable and revocable trusts alike. They are not alike.
- Planning the loan before the paperwork. Heirs who inherit a rental through a trust usually face a title and authority step first. Plan the successor-trustee paperwork before shopping.
Key Terms Defined
- Trustee: the person or institution that holds legal title to trust property and manages it.
- Beneficiary: the person entitled to benefit from the trust, who does not automatically control its property.
- Certificate of trust: a sworn summary of a trust’s key facts and trustee powers, used in place of the full document.
- Vesting: the legal way title is held, such as in a trustee of a named trust.
- Successor trustee: the person who takes over as trustee when the first trustee dies or steps down.
This is general information, not legal or tax advice. Trust terms, Michigan law and your own facts vary, so consult a qualified attorney or CPA about your situation. Tax treatment varies too.
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire, a mortgage broker arranging financing through select lenders in its wholesale network, can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Program details are subject to underwriting and are not a commitment to lend.
Frequently Asked Questions
Can a beneficiary mortgage a house held in a trust?
Not on the beneficiary’s own signature. The trustee holds title and must sign, and only within the powers the trust gives. Many beneficiaries instead wait for title to transfer to them and then finance in their own name.
Do lenders have to see the whole trust document?
Often not. Michigan law lets a trustee provide a certificate of trust, and a person who demands the full instrument without a legal requirement can face liability. Some lenders and title companies still ask for excerpts naming the trustee and granting transaction authority.
Can I use money in a trust to qualify?
Only if the funds are yours and accessible, such as a distributed balance in your name. Assets you cannot withdraw may not count. Eligible accounts are documented with statements under either asset-based path, subject to underwriting.
Are irrevocable trusts eligible?
They are much harder. Standard residential programs generally do not accept them, so options narrow to specialized lenders. Plan on counsel and a lender that handles them.
What if there are several beneficiaries?
Expect more steps: agreed valuation, written consent, a buyout structure and a title transfer. A single beneficiary is simpler. Bring an attorney in early if the co-beneficiaries disagree.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Fannie Mae Selling Guide B2-2-05
4. Homebuyer.com, Freddie Mac land trust and living trust summaries
5. Johnson Legal on Garn-St Germain
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Does a Retiring Physician Need in Assets to Qualify for a Mortgage? · Can a New Mexico Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · Can a New Mexico Trust Beneficiary Qualify for a Mortgage on Trust Assets?
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.