Fannie Mae and Freddie Mac Rules for a Trust Mortgage

Will Fannie Mae or Freddie Mac Buy a Loan Made to a Trust?

Fannie Mae and Freddie Mac both buy mortgages where a revocable living trust holds the home, provided the trust and the loan meet each agency’s written conditions. A lender that sells its loans to either agency follows that agency’s guide, so the guide your lender uses decides what your trust has to look like at closing.

Fannie Mae starts from the rule that a borrower must be a natural person, and its Selling Guide lists three exceptions. The exceptions are inter vivos revocable trusts (a living trust you create during your life and can change or cancel at any time), HomeStyle Renovation loans, and land trusts in states where the beneficiary is an individual, with land trusts accepted only on negotiated terms. Freddie Mac’s guide has two separate rules, one for a living trust and one for a land trust, and both are in force in their current form since July 2, 2025.

The lender decides whether your loan closes. A lender can add its own conditions on top of either guide, and many do. Nothing on this page quotes a rate or predicts that a loan will be approved. What the page gives you is the agencies’ own text, put side by side, so you can match your trust to the loan before the application rather than at the closing table.

FHA and VA loans follow their own agencies’ rules, and this page does not cover them. We have not verified how either program treats a home held in a trust.

Fannie Mae and Freddie Mac Trust Rules Side by Side

The table below puts the two guides’ trust rules next to each other. Each entry restates the agency’s own text in plain English, and the section numbers are in the Sources of Law block at the bottom of the page.

What Fannie Mae Requires of a Revocable Trust

Fannie Mae’s Selling Guide defines the trust it will accept as one an individual creates during life, that takes effect during that person’s life, and that the person can change or cancel at any time for any reason. Fannie Mae accepts that trust as a party to the mortgage for all transaction types, which covers a purchase, a refinance and a cash-out loan.

The guide sets five conditions that most Florida living trusts already meet when they were drafted with a home in mind.

1. One or more natural persons create the trust, and the primary beneficiary is the person or people who created it. A joint trust may have two primary beneficiaries as long as at least one of them qualifies for the loan.
2. The trustees include a person who created the trust or an institutional trustee.
3. The trustee has the power to mortgage the home to secure the loan.
4. At least one person who created the trust is underwritten as a borrower, and for a principal residence at least one of them lives in the home and signs the loan documents.
5. The title insurer insures the loan in full, with no exception for the trust or the trustees.

Fannie Mae also places the legal review on the lender. The lender must confirm that it can make loans to revocable trusts under the laws of its state and review the trust documents and state law well enough that the title insurer gives full coverage. Fannie Mae’s signature forms are written for California, and a lender in Florida adapts them to Florida practice, so the exact signature page varies from lender to lender.

What Freddie Mac Requires of a Living Trust

Freddie Mac calls the same arrangement a “Living Trust” and defines it as a trust created during the settlor’s life, effective during that life, where each settlor keeps the right to revoke or amend it. (A settlor is the person who created the trust, also called the grantor.) The lender selling the loan to Freddie Mac warrants that the trust meets every condition on the delivery date and the funding date.

Freddie Mac’s conditions follow the same shape as Fannie Mae’s, with three differences that matter in practice.

1. A settlor must be a trustee. A financial institution that customarily does trust work may join as a co-trustee, and nobody else replaces the settlor.
2. The trust must specifically authorize the trustee to borrow money for the underwritten settlor and to purchase, construct or encumber real estate to secure the loan. The lender reads the trust, or a certification of it where state law allows, to confirm that authority is there.
3. The home must be a 1 to 4 unit primary residence or a second home that an underwritten settlor occupies, or a 1 to 4 unit investment property. When the settlor lives in the home, Freddie Mac treats the trust as an owner-occupant.

Freddie Mac’s lender also checks that no beneficiary’s consent is needed for the trust to borrow (or that the consent has been given in writing), that enough trustees have signed where the trust requires more than one, and that nothing in the trust creates an unusual risk to the lender, such as required payouts in fixed amounts from principal.

Who Can Be the Trustee?

The trustee rule is where the two agencies part ways, and it decides real loans. Fannie Mae requires the trustees to include either a person who created the trust or an institutional trustee that customarily performs trust functions and is authorized to act as trustee under the law of the state. Freddie Mac requires a person who created the trust to be a trustee and allows a financial institution only as a co-trustee.

The practical results are three. A trust where you serve as your own trustee, alone or with your spouse or a child as co-trustee, fits both guides. A trust whose only trustee is a bank or trust company fits Fannie Mae and fails Freddie Mac, which matters to owners who chose an institutional trustee for privacy or for management. A trust whose only trustee is a friend, a relative, an accountant or a lawyer fits neither guide, because none of those people is the settlor and none is an institution. Our page on buying a house anonymously in Florida covers the privacy trust in detail.

Fannie Mae adds one note that Freddie Mac’s living trust section does not repeat in the text we read. When the originally named trustee is unable or unwilling to serve and the trust provides a way to appoint a successor, the trust can act through the successor trustee. Fannie Mae still requires a person who created the trust to be underwritten as a borrower, so the note helps a trust whose settlor stepped down as trustee and is still the borrower. A trustee company organized as a limited liability company raises its own question, and whether a lender treats one as an “institutional trustee” is a lender and title insurer decision that no agency text answers.

Practice pointer. Ask the lender, before the application, whether the loan will be sold to Fannie Mae or Freddie Mac, or kept by the lender. A trust company as sole trustee is the one arrangement where the answer changes whether the loan can close.

Who Signs the Note and the Mortgage?

The note is your promise to repay, and both agencies want it signed by the settlor personally. Fannie Mae requires an individual who is both the grantor and the primary beneficiary to sign the note in that person’s own name, and the trust also signs the note through its trustee. The trust may sign without recourse, which limits the trust’s liability to its interest in the home. Freddie Mac requires each underwritten settlor to sign the note individually and one or more trustees to sign for the trust using its complete legal name.

The mortgage (the guides call it the security instrument) is signed by the trustee, because the trustee holds title. Fannie Mae requires every trustee to sign the mortgage and any rider. Freddie Mac requires the trustee or trustees to sign for the trust in its complete legal name. A bank or a relative serving as co-trustee can be excluded from personal liability under both guides, as long as that person is not the settlor whose credit qualifies the loan.

The signature owners do not expect is the settlor’s acknowledgment. Both agencies require each settlor whose credit qualifies the loan to sign a statement on the mortgage accepting all of its terms. Fannie Mae publishes the wording, which identifies the trust by its complete legal name and the date of the trust instrument, and the settlor signs it below the borrower’s signature lines. Freddie Mac requires the acknowledgment in its own prescribed form.

The mortgage is recorded in the county records, so the acknowledgment puts the settlor’s name and the trust’s full name on the public record even when the deed names only the trustee. An owner who put the house in a trust with an institutional trustee to keep the deed private should know that a conventional mortgage brings the name back onto the record.

Florida adds one more signature for a married owner. The Florida Constitution requires the owner of homestead real estate, joined by the spouse if married, to sign any mortgage on it, and Freddie Mac’s guide requires the signature of anyone whose signature state law needs to create a valid lien or waive rights in the property. A spouse who is not a trustee and not a borrower still signs the mortgage on a Florida homestead.

What the Title Policy and the Loan File Must Show

Both agencies require the deed to run to the trustee. Fannie Mae accepts title vested in the trustees alone, in the trustees together with the individual borrowers, or in the trustees of more than one qualifying trust. Freddie Mac requires title vested in the trustees on behalf of the trust, or in the form customary for living trusts in the state.

The title insurance policy must say how title is vested and must list no exception for the trust or the trustees. Fannie Mae states plainly that title held in a trust does not reduce its rights as a creditor, including the right to take full title in a foreclosure. A deed into the trust that misnames the trustee or the trust is the kind of defect that produces a title exception, which is why we prepare the deed after reading the trust itself. Our page on putting your house in a trust in Florida covers that deed.

The loan file differs between the two agencies. Fannie Mae requires the lender to keep any trust documents the title insurer relied on. Freddie Mac requires either the full trust agreement or a certification or summary where state law lets a lender rely on one. Florida is one of those states, and a Florida certification of trust names the trustee and the trustee’s powers without disclosing who inherits. Fannie Mae also directs that the trust’s name be left out of the loan delivery data, with only the borrower’s own name and Social Security number reported.

Can You Refinance a House Already in a Trust?

A refinance is a new loan, so the trust is tested again against whichever guide the new lender uses. Fannie Mae’s acceptance covers all transaction types, and Freddie Mac’s living trust rule applies to every home mortgage it buys, so a house already in a qualifying trust can be refinanced without leaving the trust.

Three facts decide whether an existing trust still qualifies on the day of the refinance.

1. You are still a trustee. A settlor who resigned in favor of a child or a trust company meets Freddie Mac’s rule only if the settlor comes back as a co-trustee.
2. The trust is still revocable. A joint trust that became irrevocable in part at a spouse’s death raises the question covered in the last section below.
3. The trust authorizes the trustee to borrow and to mortgage the home. Freddie Mac asks for specific authority, and a short trust drafted from a form can leave the lender looking for language that is not there.

If a lender asks that the house be deeded out of the trust before closing, a second deed puts it back afterward, and that second deed is the step families forget. A home left outside the trust after a refinance goes through probate at death unless something else, such as a lady bird deed, passes it. The mortgage you already have stays in place when the house moves into the trust. Federal law bars a lender from calling a home loan due because the borrower transferred the home into a living trust the borrower remains a beneficiary of and still lives in, unless the borrower refuses to give the lender reasonable means of learning about any later transfer of the beneficial interest or change in occupancy. Our page on putting a house with a mortgage in a trust covers that rule and its limits.

Can You Get a HELOC on a Home in a Revocable Trust?

A home equity line of credit on a house held in a revocable trust is set by the bank that offers the line. The trust sections of the Fannie Mae and Freddie Mac guides speak of mortgages sold to those agencies, and neither section addresses a home equity line. Each bank writes its own trust conditions for a line, and those conditions can differ from one bank to the next.

The legal mechanics are the same as for any trust mortgage. The trustee holds title, so the trustee signs the mortgage that secures the line, and the bank will want proof that the trust lets the trustee borrow and encumber the home. A Florida certification of trust gives the bank that proof, and Florida protects a lender that relies on one in good faith. A married owner’s spouse joins in the mortgage on a Florida homestead whether or not the spouse is a trustee.

A line you opened before the house went into the trust is a loan secured by your home, and the federal rule on transfers into a living trust applies to it as it applies to a first mortgage, as long as you remain a beneficiary and keep living in the home. Our page on borrowing against a trust covers the trustee’s borrowing power under Florida law.

Practice pointer. Ask the bank for its written requirements for a line on a home in a trust before you apply, and send it a certification of trust rather than the trust itself. The certification answers the bank’s question and keeps the names of your beneficiaries in your own file.

Irrevocable Trusts and Land Trusts

An irrevocable trust does not qualify as the borrower under either agency’s trust rule. Fannie Mae’s three exceptions to its natural-person rule name revocable living trusts and land trusts, and an irrevocable trust is neither. Freddie Mac’s living trust definition requires each settlor to keep the right to revoke or amend. A loan to an irrevocable trust, such as a Medicaid asset protection trust or a trust for children, comes from a lender that keeps the loan or sells it outside the two agencies, on that lender’s own terms.

A land trust is a different arrangement, where a trustee holds the deed and the beneficiary controls the property and keeps the income. Freddie Mac has a published rule for land trusts, effective in its current form since July 2, 2025. The property must be in a state with a land trust statute (Florida has one), every beneficiary must be an individual, at least one beneficiary must be a qualified borrower, the property must be the trust’s only asset, and the trustee must be a corporation or financial institution customarily in the business of acting as land trustee. The borrowing beneficiaries sign the note, the land trustee signs the mortgage, and each borrowing beneficiary signs a collateral assignment of the beneficial interest to the lender. Fannie Mae accepts land trusts only on negotiated terms. Our page on getting a mortgage on a Florida land trust covers that loan in full, and our Florida land trust guide covers the trust itself.

One consequence follows from Freddie Mac’s individual-beneficiary rule. A land trust whose beneficiary is an LLC, a structure often recommended for liability reasons, cannot get a land trust loan sold to Freddie Mac, and Fannie Mae’s own exception is limited to an individual beneficiary as well.

What Happens After a Death Makes the Trust Irrevocable?

The loan already in place is not affected. Fannie Mae says a trust’s eligibility is not affected by a provision that the trust becomes irrevocable at a settlor’s death, and both agencies test the trust when the loan is delivered or funded. A joint trust that becomes irrevocable in part when the first spouse dies does not undo the mortgage the couple signed.

The next loan is where the change matters. Fannie Mae warns that a change in the trust’s structure after delivery may affect the trust’s eligibility in a later loan, and Freddie Mac’s living trust rule requires a settlor who can still revoke or amend. A surviving spouse who wants to refinance the house in a joint trust, or to open a home equity line on it, may find that the share held under the deceased spouse’s terms no longer fits either guide. How that is solved depends on the trust’s terms after the first death, and the answer is in the document rather than in the guide. Our page on Florida trust administration covers the steps after a death.

What It Costs

Government costs, including recording and any documentary stamp tax, are additional and passed through at cost. Posted fees are honored for 90 days. We do not arrange loans, quote rates or promise that a lender will approve a loan. The full schedule is on our pricing page.

A trust drafted for a family that owns a home should anticipate the lender. The borrowing clause, the trustee lineup and the exact name of the trust on the deed cost nothing extra to get right at drafting and cost a delayed closing to fix afterward. Book a no-cost consult and bring the trust you have.

Frequently Asked Questions

Common Situations

The situations below are composite examples written to show how the rules apply, and the people in them are not clients of the firm.

The trust company as sole trustee. A Naples buyer sets up a revocable trust with a trust company as its only trustee so the deed will not carry her name, and applies for a conventional loan. Her lender sells its loans to Freddie Mac, and the underwriter flags the trustee. Under Freddie Mac’s rule she must serve as a trustee herself, with the trust company beside her as co-trustee. Under Fannie Mae’s rule the trust company could serve alone. She can amend the trust to add herself, or find a lender selling the loan to Fannie Mae, and either way she learns that her name will appear on the recorded mortgage through the settlor acknowledgment.

The refinance after the first death. A Sarasota widower wants to lower the rate on the house he and his late wife put in their joint trust in 2015. Their trust split into two shares at her death, and her share became irrevocable. The lender asks for the trust and a certification. We read the trust to see which share holds the house and what the surviving trustee may do, and the answer to that question sets the path for the loan.

The roof and the home equity line. A Jacksonville couple in their seventies need $60,000 for a new roof and want a line of credit on their paid-off home, which sits in their revocable trust. The bank asks for a certification of trust and both signatures on the mortgage. Their trust lets the trustees borrow, so the certification answers the bank in two pages and their beneficiaries’ names stay out of the bank’s file.

Sources of Law

• Fannie Mae Selling Guide B2-2-01, General Borrower Eligibility Requirements (09/03/2025) (borrowers must be natural persons; exceptions for inter vivos revocable trusts, HomeStyle Renovation mortgages, and land trusts where the beneficiary is an individual, the last “on a negotiated basis”). Retrieved 2026-10-16.
• Fannie Mae Selling Guide B2-2-05, Inter Vivos Revocable Trusts (10/31/2017) (definition; eligible “for all transaction types”; trust and trustee requirements, including “an institutional trustee that customarily performs trust functions in and is authorized to act as trustee under the laws of the applicable state”; successor trustee note; “All property and occupancy types are eligible”; title policy and vesting; trust eligibility tested “at the time the loan is delivered”; trust name excluded from delivery data). Retrieved 2026-10-16.
• Fannie Mae Selling Guide B8-5-02 (10/31/2017) (trustees execute the security instrument; settlor acknowledgment; trust may sign the note “without recourse”; trustee liability exclusions) and E-2-04 (08/05/2026) (signature blocks; text of the settlor acknowledgment; forms written for California and adapted by the lender elsewhere). Retrieved 2026-10-16.
• Freddie Mac Single-Family Seller/Servicer Guide, §5103.5, Living Trust (effective 07/02/2025), subsections (a) to (g) (underwritten settlor; settlor as trustee, financial institution as co-trustee; specific authority to borrow and encumber; property types; vesting and title policy; signatures and acknowledgment; seller review; trust agreement or certification in the file); Glossary, “Living Trust” and “Land Trust.” Retrieved 2026-10-16. Reading note. Exhibits 9A and 9B (Freddie Mac’s note and security instrument signature and acknowledgment forms) were not read, so this page does not describe their wording.
• Freddie Mac Guide §5103.6, Land Trust (effective 07/02/2025) (statute state; individual beneficiaries; corporate or financial institution land trustee; only asset; beneficiaries sign the note; trustee executes the security instrument; collateral assignment) and §4101.6, Signatures required (signatures necessary under state law “to create a valid lien, pass clear title, waive inchoate rights to property”). Retrieved 2026-10-16.
• 12 U.S.C. §1701j-3(d)(8) (no due-on-sale enforcement on a transfer into an inter vivos trust in which the borrower is and remains a beneficiary); 12 C.F.R. §191.5(b)(1)(vi) and (b)(5) (protection limited to a home occupied by the borrower; notice condition; later disqualifying event). Retrieved 2026-10-16.
• Art. X, §4(c), Fla. Const. (the owner of homestead real estate, “joined by the spouse if married,” may alienate the homestead by mortgage). Fla. Stat. §736.1017 (annotated) (certification of trust; protection of a person relying on it in good faith). Fla. Stat. §689.071 (Florida Land Trust Act).
• FHA (HUD Handbook 4000.1) and VA rules for borrowers whose homes are held in trust were not researched for this page and are not described on it.

What I Check Before a Trust Goes to a Lender

I went through both agencies’ trust rules myself rather than relying on a lender’s summary of them, and the two guides disagree on the one question families rarely ask before applying, which is who the trustee is. Fannie Mae accepts a trust company standing alone. Freddie Mac insists that the person who created the trust stay on as a trustee. A trust drafted with a bank as sole trustee can be correct for every purpose the family had in mind and still stall a Freddie Mac loan. In 14 years of law practice I also litigate deeds after they fail, which enhances the practice of drafting deeds, and a trust deed that misnames the trustee is one of the defects a title insurer reads first.

Having read both guides side by side, I have a few take-home points.

The first is the trustee lineup. When I draft a trust for a homeowner, I keep the settlor as a trustee unless there is a reason not to, because that arrangement fits both agencies.

The second is the borrowing clause. Freddie Mac asks for specific authority to borrow and to encumber real estate, and I write that authority into the trust in words a lender’s reviewer can find on a single page.

The third is the signature page. The settlor acknowledgment on a recorded mortgage puts the owner’s name and the trust’s full name on the public record, so a client who wants privacy hears that from me before the trust is signed, not from the closing agent.

Avoid changing trustees in the months before a purchase or a refinance without checking the lender’s guide first. My honest limit is that neither guide tells you which agency your lender will sell a given loan to, and lenders add their own conditions, so the lender’s written trust requirements are the last word on whether your loan closes.

Updated on October 16, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. General information about Florida law, the Fannie Mae and Freddie Mac guides and our posted fees, not legal advice, and no prediction of any outcome or loan approval. Past results do not guarantee a similar outcome. No attorney-client relationship is created by reading this page. Do not send confidential information until we have agreed to represent you.