B3-3.4-16, Trust Income (03/04/2026)

The lender must obtain one or more of the following trust verification documents to confirm the amount, frequency, type of income being received, and the date the trust was created:

• a copy of the trust agreement,
• the trustee's statement (provided the borrower is not the trustee),
• the trust's federal income tax returns, or
• a letter from an accountant or attorney who reviewed the trust documents, when the above documents are not available or when the borrower is the trustee.

Trust income with variable payments also requires a minimum 24-month history of trust income by obtaining copies of the following:

• the borrower's signed federal tax income tax returns for the most recent two years, or
• the trust's federal income tax returns for the most recent two years.

Additionally, the lender must document receipt of the income for at least one month using sources including, but not limited to:

• bank statements,
• cancelled checks, or
• evidence of other electronic receipt of payments.

Fixed payments: The lender must confirm the trust was established for 12 months or longer, unless all of the following requirements are met:

• the trust verification documentation reflects fixed payments,
• the borrower is not the grantor, and
• at least one payment is received prior to closing.

Variable payments: A minimum 24-month history is required.

Note: Trusts created in the previous 12 months using a borrower's eligible employment-related assets, as defined in B3-3.4-06, Employment Related Assets as Qualifying IncomeB3-3.4-06, Employment Related Assets as Qualifying Income, may still be used as stable income but must meet the income calculation and all other requirements in that topic.

The lender must confirm continuance of income based on the type of income received through the trust. For example, if the income from the trust is derived from rental income, then three-year continuance in not required. However, if the income is a fixed payment derived from a depleting asset, the lender must document that income is expected to continue for at least three years from the note date.

Note: If any assets from the trust are being used for down payment, closing costs, or reserves, those assets must be subtracted from the total amount before determining if the trust income meets these Income Continuance requirements.