Can You Put a House With a Mortgage in a Trust?

Can You Put a Mortgaged House in a Trust?

A mortgaged house can go into your revocable living trust the same way a paid-off house does, by a new deed from you to yourself as trustee, recorded with the county. The lender is not a party to that deed and does not sign it. The mortgage stays recorded against the house, the servicer keeps sending the same statement, and the payment does not change. The general walkthrough of the deed, the homestead rules and the trade-offs is on our page about putting your house in a trust in Florida. The questions below are the ones the mortgage adds.

The fear behind the search is the due-on-sale clause (the term in almost every mortgage that lets the lender demand the full balance if the property is transferred). A deed into a trust is a transfer, so the fear is reasonable. Congress answered it in 1982 in the Garn-St Germain Act, which lists transfers a lender may not use to call a residential loan, and a transfer into a living trust is on that list.

The Act stops the lender from accelerating the loan. The Act does not move the debt. You signed the note as an individual, and you stay personally liable on it after the house goes into the trust, exactly as before.

Practice pointer. Families sometimes assume the trust now owes the mortgage and the person who signed the note is released. Keep paying from the same account, and treat the loan as yours, because the lender still does.

Will the Lender Call the Loan?

For a home you live in with one to four units, the lender may not call the loan because of the transfer into your trust. Two federal texts decide this, and they read slightly differently.

1. The statute. The Garn-St Germain Act covers a loan secured by residential property with fewer than five dwelling units. A lender may not use the due-on-sale clause on a transfer into an inter vivos trust (a trust created during the owner’s life) in which the borrower is and remains a beneficiary, and which does not transfer the right to live in the property. The Act defines a lender as any person making a real property loan, so a credit union, a state bank, a private lender and a seller who financed the sale are all bound.
2. The regulation. The federal regulation that carries out the statute protects the trust transfer for a home occupied or to be occupied by the borrower, with the borrower remaining the beneficiary and the occupant. The regulation also carves reverse mortgages out of this protection, so a reverse mortgage has to be read on its own terms.

The regulation adds one more rule that matters years later. The protection applies to the transfer as it stood when you made it, and the regulation lets the lender enforce the clause on any later event that would have disqualified the transfer. Moving out and renting the house is the usual example. A change in who holds the beneficial interest in the trust during your life is another.

At your death a separate part of the same statute takes over. The Act also bars the lender from calling the loan on a transfer to a relative resulting from the borrower’s death, which is why a child who inherits through the trust and keeps paying is usually not forced to refinance on the lender’s schedule. Our guide to an inherited house with a mortgage covers that side.

Practice pointer. The occupancy condition is the one that changes after the deed. A parent who moves into assisted living and rents the house out has created the later event the regulation describes. Read the loan again before the house is rented, and ask the lender in writing if the answer matters.

Rentals, Land Trusts and Irrevocable Trusts

The federal protection is written for an owner-occupied home in a revocable trust. Four situations fall partly or wholly outside it.

• Five or more units. An apartment building with five units is outside the statute entirely. Commercial property is outside it too.
• A rental with one to four units. The statute’s words do not say who must live in the property, and the regulation limits its trust protection to a home the borrower occupies. No Florida decision on a rental deeded into a trust was found, so nobody can tell you with certainty how a court would read the two together. The safe course for a rental is the lender’s written consent before recording.
• A land trust. A Florida land trust holds title in a trustee and usually makes the beneficiary’s interest personal property. Whether a land trust counts as an inter vivos trust under the federal statute is not answered by either text, and we found no case deciding it. Financing a land trust is its own subject, covered on our page about getting a mortgage on a Florida land trust.
• An irrevocable trust. The statute does not say the trust must be revocable. The statute says the borrower must be and remain a beneficiary. An irrevocable trust that keeps you as a beneficiary and lets you live in the home reads on the statute’s words, and one that leaves you out of the beneficiaries does not. A Medicaid asset protection trust holding a mortgaged house belongs in that second conversation, along with the stamp tax below.

Practice pointer. Investors often put a mortgaged rental into the same revocable trust as the home on the theory that one deed works like the other. Read the rental loan’s transfer clause first. Investment loans are frequently written on different forms, and the borrower who recorded without asking has no federal answer if the lender objects.

Do You Have to Tell the Lender?

No consent is needed for an owner-occupied home. The regulation does give the lender one right, which is to ask for reasonable means, acceptable to the lender, of getting timely notice if the beneficial interest in the trust later changes hands or the occupancy changes. A borrower who refuses that request, as a condition of the transfer, loses the protection.

The practical answer is to tell the servicer before anyone asks. I recommend a one-page letter, sent after the deed is recorded, with four things in it.

1. The loan number and the property address.
2. A copy of the recorded deed into the trust.
3. A certification of trust, which is a short sworn summary that Florida law lets a trustee give a third party instead of the trust itself. The certification shows the trust exists, who the trustee is and that you can revoke it, without showing who inherits.
4. A sentence agreeing to notify the servicer in writing if the beneficial interest in the trust changes during your life or the house stops being your home.

Send the letter by a method that gives you proof of delivery and keep a copy with the trust. The servicer’s address for correspondence is usually printed on the monthly statement.

Practice pointer. A customer service representative asked on the phone whether a house can go into a trust may say no, because the question sounds like a sale. An answer read from a script binds nobody. The federal statute and your recorded loan documents govern, and the letter puts the answer in writing.

Documentary Stamp Tax on a Mortgaged House

Florida charges documentary stamp tax on a deed at 70 cents per $100 of consideration (60 cents in Miami-Dade on a single-family home), and Florida counts the balance of any mortgage on the property as consideration. A gift of a mortgaged house to a child is taxed on the unpaid balance for that reason. Owners who know that rule worry that a deed into their own trust is taxed the same way, and the worry is what our guide to Florida documentary stamp tax flags as the question to ask.

The Department of Revenue’s rule on deeds to trustees answers the question in two places.

1. Your own revocable trust. A deed to a trustee from a grantor who holds the power to revoke the trust is not a transfer of ownership subject to the stamp tax. The paragraph has no exception for a mortgage. A separate paragraph reaches the same result where you are the sole beneficiary, whether or not the property is encumbered.
2. An irrevocable trust with other beneficiaries. When the deed is a gift into a trust that other people benefit from and the house carries a mortgage, the tax runs on those beneficiaries’ share of the mortgage, allocated by their percentage interest. A house with a $300,000 balance deeded into a trust where your daughter is a 50% beneficiary is taxed on $150,000. At the statewide rate that is $1,050, and in Miami-Dade on a single-family home it is $900.

The tax is read from the face of the deed, so the wording matters. A funding deed into a revocable trust should say that the grantor holds the power to revoke the trust, and it should not describe the transfer as made subject to the mortgage as though the trust were taking over the debt.

Practice pointer. The department’s rule on trust deeds has carried three different subsection numbers, (29), (28) and now (25). A deed that cites the exemption by an old number invites a question at the recording counter. Cite the paragraph by its name and confirm the current number the week the deed is signed.

Title Insurance, Homeowner’s Insurance and the Homestead Exemption

Title insurance. The owner’s title policy you bought at closing protects you against defects in the title, and the question is whether that protection follows the house into the trust. The current owner’s policy form used in Florida, the 2021 ALTA policy with Florida modifications, treats a trustee of a trust you created for estate planning as an insured. Older policy forms covered a successor only so long as the original owner had liability on the deed’s warranties. Under those forms, a quitclaim deed into the trust can leave the trust without coverage once you have died, which is when a title problem usually surfaces. A warranty deed into the trust keeps the old policy working under either form, and it is the deed we use.

Homeowner’s insurance. Call the insurer after the deed is recorded and ask for the policy to name you as trustee of your trust, or to add the trust as an additional insured, so the named insured matches the owner on the deed. A claim on a policy that names someone other than the record owner is a fight nobody needs after a hurricane. The lender stays listed on the policy as before.

The homestead exemption. Florida law treats a beneficial interest for life as equitable title for the homestead exemption, so a home in a properly drafted revocable trust keeps the exemption. The Save Our Homes cap (the limit on how fast the assessed value can rise) does not reset either, because a transfer between legal and equitable title, with the same owner still entitled to the exemption, is not a change of ownership. The mortgage has no effect on either rule. The full homestead analysis, including the spouse’s signature and the inheritance limits, is on our page about the Florida homestead in a revocable trust.

Practice pointer. The homestead exemption and the title policy both depend on the deed’s wording, and both are invisible until something goes wrong. Read the old owner’s policy before choosing the deed, and tell the county property appraiser about the transfer the month it is recorded.

Refinancing Later With the House in the Trust

Fannie Mae and Freddie Mac both buy loans where a revocable living trust holds title, so a house in your trust can be refinanced without leaving it. Both agencies require the person who created the trust to be underwritten as a borrower, the title insurance to show title vested in the trustee with no exception for the trust, and the trust to give the trustee power to borrow and mortgage. The two agencies differ on who may serve as trustee, and the full comparison is on our page about the Fannie Mae and Freddie Mac rules for a trust mortgage. Neither agency’s trust rule covers an ordinary irrevocable trust as a borrower.

Florida law gives a trustee the power to borrow and mortgage trust property unless the trust says otherwise, and Freddie Mac’s rule asks for that authority to appear specifically in the trust. A trust that says it in plain words saves the lender a question. Some lenders still ask the owner to deed the house out of the trust for the closing and back in afterward. The lender decides, its own rules can be stricter than the agency guide, and the deed back into the trust matters as much as the first one. Other ways to borrow against a trust are on our page about whether you can borrow against a trust.

Practice pointer. Ask the lender at application whether it will close with title in the trust, and send the certification of trust with the first batch of documents. The deed-out request usually comes from a closing department that has not seen the trust’s borrowing power.

How to Put a House With a Mortgage in a Trust, Step by Step

1. Pull the mortgage. Get the latest statement and a copy of the recorded mortgage. Confirm the property has one to four units, that you live there, that you will remain a beneficiary of the trust, and whether the loan is a reverse mortgage.
2. Check the trust. The trust has to exist before the deed, signed with two witnesses and a notary. Confirm it gives the trustee the power to borrow and mortgage, and that you hold the power to revoke it.
3. Draft a warranty deed. The deed runs from you to yourself as trustee, names the trust by its title and date, recites the trustee’s powers on its face, and states that you can revoke the trust. If the house is your homestead and you are married, your spouse signs the deed too, even if your spouse is not on title.
4. Sign and record. Sign before two witnesses and a notary, and record with the clerk in the county where the house sits. Recording costs $10 for the first page and $8.50 for each page after, so a three-page deed costs $27.
5. Write to the servicer. Send the letter described above, with the recorded deed and a certification of trust, by a method that proves delivery.
6. Call the insurer. Ask the homeowner’s insurer to name you as trustee or add the trust as an additional insured.
7. Tell the property appraiser. Ask the county property appraiser what it needs to keep the homestead exemption on file for the trust.

The trust funding guide covers the rest of the trust, meaning the bank accounts, brokerage accounts and beneficiary designations that sit next to the house. If you are still deciding between a trust and a deed, the deed selector asks four questions and points to the right document, and our page on a lady bird deed with a mortgage covers the deed that skips probate without moving the house at all during your life.

What It Costs

If you already have a trust, a deed moving the house into it is a flat fee from $550, and that fee includes reading the trust so the deed names the correct trustee and carries the powers the trust grants. If we are building the trust, the Complete Trust Plan is a flat fee from $3,200 ($4,500 for a couple), and it includes one funding deed for your Florida home. Each additional property is $199. The mortgage does not change any of these fees. The full schedule is on our pricing page.

Government costs, including recording and any documentary stamp tax, are additional and passed through at cost. Posted fees are honored for 90 days. A dispute with a lender or over the house itself is litigation, which is quoted per matter and never offered as a flat fee.

Frequently Asked Questions

Common Situations

The situations below are composites written to show how the rules apply, and none of them describes a real client.

The retiree with twelve years left on the loan. A Clearwater homeowner owes $140,000 on a house worth $410,000 and wants it out of probate for her two sons. The deed into her revocable trust owes no stamp tax on the balance, the servicer receives the deed and a certification of trust the week it records, and the insurer reissues the declarations page in her name as trustee. The payment does not change by a dollar.

The duplex with the owner upstairs. A Gainesville couple live in one unit of a duplex and rent the other. The building has two units and they occupy it, so the federal protection applies to the transfer into their joint trust. A second duplex across town, which they rent out entirely, waits for the lender’s written consent before its deed is recorded.

The Medicaid trust with a mortgage still on the house. A widower planning five years ahead wants his home in an irrevocable trust for his three children, with $90,000 still owed. Two questions come before the deed. The first is whether he remains a beneficiary, which decides the federal protection. The second is the stamp tax, which on a gift into that trust runs on the children’s share of the $90,000 balance.

Sources of Law

• Garn-St Germain Depository Institutions Act, 12 U.S.C. §1701j-3(a) (“lender” includes any person making a real property loan) and (d) (residential real property containing less than five dwelling units), (d)(5) (transfer to a relative resulting from the death of a borrower), (d)(8) (“a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property”). govinfo.gov, retrieved 2026-10-16.
• 12 C.F.R. §191.5(b)(1)(vi) (trust transfer protected for a home occupied by the borrower, who “is and remains the beneficiary and occupant,” unless the borrower refuses “reasonable means acceptable to the lender” of “timely notice of any subsequent transfer of the beneficial interest or change in occupancy”; the (b)(1) lead-in excepts reverse mortgages) and (b)(5) (lender may enforce on “the subsequent occurrence of any event which disqualifies a transfer”); 12 C.F.R. §141.14 (“home” means a dwelling for four or fewer families). eCFR, retrieved 2026-10-16. Reading note. Neither text decides whether a Florida land trust is an “inter vivos trust,” and no case deciding it was located.
• Fannie Mae Selling Guide B2-2-01 (09/03/2025) (exceptions to the natural-person borrower rule are inter vivos revocable trusts and land trusts on a negotiated basis) and B2-2-05 (10/31/2017) (trustee must have the power to mortgage; title policy vested in the trustee with no trust exceptions). Freddie Mac Single-Family Seller/Servicer Guide §5103.5 (eff. 07/02/2025) ((b) trustee “specifically authorized” to borrow and to encumber realty; (f) and (g) trust agreement or a certification where state law permits). Retrieved 2026-10-16. Agency guides bind the lenders that sell to them, and a lender may impose stricter terms.
• Fla. Stat. §201.02(1)(a) (70 cents per $100 of consideration; consideration includes the amount of any mortgage, whether or not the debt is assumed). Fla. Admin. Code R. 12B-4.013, paragraph “Trusts Pursuant to Chapter 689, F.S.,” subparagraphs (a) (no change in beneficial ownership, “whether or not the real property is encumbered by a mortgage”), (c) (gift in trust; tax on the other beneficiaries’ proportionate share of the mortgage) and (i) (a deed from a grantor with the power to revoke is not a transfer subject to the tax). Reading note. The subsection has been numbered (29), (28) and, after the 2025 to 2026 amendment, (25); the text of (a) to (i) is substantively unchanged. Retrieved 2026-09-14.
• Fla. Stat. §196.041(2) (a beneficial interest for life is equitable title for the homestead exemption); §193.155(3)(a)1.b (no change of ownership on a transfer between legal and equitable title where the same person remains entitled to the exemption).
• Fla. Stat. §736.0816 (annotated)(6) (trustee power to borrow and to mortgage trust property); §736.1017 (annotated) (certification of trust in place of the trust instrument); §689.073(1) (trustee powers recited in the recorded deed); §28.24(13) (recording fee, $10 for the first page and $8.50 for each additional page). Fla. Const. Art. X, §4(c) (spouse joins a conveyance of homestead).
• On title insurance, Administration of Trusts in Florida, ch. 14 (The Florida Bar and Attorneys’ Title Insurance Fund, rev. Dec. 2025), §14.4.D (a warranty deed into a trust preserves existing title insurance and prior warranties) and the definition of “Insured” in the ALTA Owner’s Policy (rev. 07/21) with Florida modifications.
• Advertised fees are honored for 90 days from the posted date; government costs (recording, documentary stamps, certified copies) are additional and passed through at cost. Fees are not a prediction of any outcome.

What I Check Before a Mortgaged House Goes Into a Trust

A mortgage statement is the first document I ask for when a house is going into a trust, ahead of the trust itself. The statement names the servicer and the loan, and the recorded mortgage behind it, through its riders and occupancy terms, usually shows whether the property is the owner’s home, a second home or a rental. In my practice, the statement and the recorded mortgage together decide whether the federal protection applies before I draft a word of the deed. I also litigate deeds after they fail, which enhances the practice of drafting deeds.

A common question I hear is, “Does the bank have to approve this first?” For a home you live in with one to four units, the bank does not, and the regulation gives the bank only the right to ask how it will hear about later changes. My advice is to answer that request in writing the week the deed records, before the bank has a reason to make it. Having read the federal statute, the regulation and both agencies’ trust rules side by side, I have a few take-home points.

The first is occupancy. The protection is measured when you sign, and the regulation lets the lender act on a later change. An owner who moves to a daughter’s house and rents the old one out has changed the one fact the regulation cares about most, usually without anyone reading the loan again.

The second is the borrowing power in the trust. A trust that says nothing about borrowing still has the power under Florida law, and a lender’s closing department may not accept that answer. One sentence in the trust (a sentence that costs nothing to include when the trust is drafted) is the difference between refinancing in the trust and deeding the house out and back.

The third is the stamp tax on an irrevocable trust. Owners who have heard that a deed into a trust is tax-free carry that rule into a Medicaid or asset protection trust, where the other beneficiaries’ share of the mortgage is taxed.

Avoid recording a deed for a rental property into a trust on the strength of the rule for homes. The regulation’s words are about a home the borrower lives in.

My honest limit is that no Florida court has decided how the federal statute treats a mortgaged rental or a land trust, and no lender is bound by what a page like this one says. What I can do is read your loan and your trust together and tell you which conditions you meet.

Updated on October 16, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. General information about Florida law, federal mortgage law and our posted fees, not legal advice, and no prediction of any outcome. 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.