Can the Grantor Get a Mortgage on House in an Irrevocable Trust?

 In Irrevocable Trusts, Long-Term Care Planning, Real Estate

Photo by Evan Dvorkin on Unsplash


Can you get a mortgage if you are the grantor of a home in an irrevocable trust and your trustee approves of it?


Not a traditional mortgage. While the trust probably would permit a mortgage, banks won’t grant a mortgage to property in an irrevocable trust. A family member or friend might lend the money if they can afford to do so. But then there’s the issue of what happens with the money. I’m not sure what the terms of your trust are, but the trustee may only disburse any funds borrowed under the terms of the trust. The trustee could almost certainly use the funds to maintain and improve the house. But, for instance, if the trust was created for Medicaid planning purposes, the funds could not be used for the grantor’s benefit. Such trusts do not permit the distribution of principal.

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