While it isn’t a common occurrence, veterans and military members may be able to purchase with a VA home loan through a revocable inter vivos trust.
This is a legal and financial arrangement where you put assets into a trust to be utilized during your lifetime. Generally, these types of trusts are created by individuals and can be changed or closed at any point during a person’s life.
The person who set up the trust must be the primary beneficiary, and lenders will underwrite the loan using this person’s credit, assets, income and debts.
Lenders may be willing to count income from a trust as effective income toward mortgage qualification. Guidelines and policies can vary by lender.
At Veterans United, in order to consider trust income, we would need to see the documentation that confirms payment amount, frequency and duration. If the documents don’t clearly define the amount, we’ll typically use a 24-month average based on tax paperwork.
The income must be expected to continue for the next three years.
We’ll also need to obtain copies of all trust documents, along with an opinion letter from a title attorney.
In addition to evaluating credit, debts and assets, underwriters will read over trust documents with a checklist in hand.
Some issues or areas of concern may include:
We’ll also need to see a title attorney’s opinion letter regarding the trust documentation. These legal documents evaluate the legality of the trust and whether its assets can be used to obtain a home loan.
The attorney’s letter needs to reflect that in his or her opinion:
Every trust situation is different. Talk with a Veterans United loan specialist if you have questions about getting a VA home loan using a revocable living trust.
Your Certificate of Eligibility (COE) verifies you meet the military service requirements for a VA loan. However, not everyone knows there are multiple ways to obtain your COE – some easier than others.
Midway through Fiscal Year 2021, the VA loan program is on pace to blow past last year's record-setting 1.2 million loans. See which cities are seeing the most growth compared to last year.