Using a trust to purchase a house

[Tyler Brown]

As part of Medicaid planning, we recently created an irrevocable trust and placed my mother-in-law's two homes into it.  She lives with us, and she really has little to do with the homes; I do all the day to day management and landlording.

The two houses are rented, and generate a gross of $75k a year for the trust.

In the medium term future, I'd like to purchase another rental SFH or small MFH and have it placed in the trust as well. Most info I find online relates to using an LLC to purchase a home; I'm not finding a lot on using a trust.

My wife is the trustee of the trust, but she couldn't care less about real estate, so I'll be the only one looking for/analyzing potential deals, and then doing all the work to clean it up and get tenants in there.

I guess I'll ask my most basic question first: When purchasing the new rental house, can the trust itself directly purchase it, or would my wife and I need to buy it, then transfer it into the trust at some time after the closing?

Also, when applying for a mortgage, how is the maximum amount I'd be approved for determined?  As mentioned, the trust generates $75k in gross income, but then my wife and I have our own jobs and incomes as well.  Most of the homes I'm looking at are in the $300k-$400k area, so they're likely too high for just the trust's own income of $75k to swing.