Buying a home in Maryland with a trust
[Editor's note: Fannie Mae recently issued new restrictions on use of Power of Attorney. Please read this article and contact our office with any questions.]
If you must use Power of Attorney, please contact our office.
One of the ways that many homeowners protect their real property is by drawing up a Revocable Trust Agreement. Here are some things to know about trust agreements in regards to property:
1. While it may be desirable to purchase in the name of a trust, the State of Maryland does not recognize a trust as a Maryland first-time homebuyer. Consequently, even if the trustee and/or the beneficiary are Maryland First Time Homebuyers, since the state views the purchaser as a Trust, the purchasers will not obtain the Maryland First Time Homebuyer credit.
Learn more about the Maryland First Time Homebuyer exemption.
2. A Power of Attorney cannot typically be used to buy, sell or refinance a property that is owned in a trust. The rare exception is if the trust states specifically that a Power of Attorney is authorized. If the trustee of a trust is not able to sign on behalf of the trust, he or she needs to follow the guidelines spelled out in the trust agreement.
3. Keep in mind that when a Trust owns the property, the trustee is bound by the terms of the trust. For example, if the trust states that all trustees must sign all documents in regards to a sale/refinance of a property, then all trustees must sign.