Question: Is it possible to take out a loan based on using my portion of, and/or the real estate property held in our living family trust as collateral? I will try to explain as best I can all of the circumstances. My parents and I live in San Diego California. My parents have a living family trust set up in which I am to receive 50 percent of their assets, the assets primarily being their real property, the home they have lived in for some 40 years. This property is located in a very exclusive area of San Diego and we know that the current value is 1 million dollars. I am a single mom and on my income and FICO score of 730 plus the most I qualify for on a home loan is 250,000. That will not even allow me to buy anything except a shack in the middle of gang territory in Logan Heights. We actually went to look at the few properties there that were going for 245,000 to 350,000, and there were people threatening us and my daughter was so frightened that she became ill. I can not say that I did any better, I was just hoping to get by some young men without a gun being drawn and get the heck out of there. With the high median home prices here and the fact that it just keeps going up and our incomes do not, I am being shut out from buying a home. My parents would really love to help me do so. They are elderly and my father has been in the hospital for 3 months now with complications from open heart surgery. They do not even want to stay in the home they have because it is too much work for them to maintain. But we all seem to be stuck in that they can't sell their home so that we could split the money so that I could purchase a home and they could purchase a condo or townhome because they bought the place for 29,000 and it is worth 1,000,000 now so they would pay so much even after the 500,00 max exclusion on capital gains that we would not be able to purchase two properties. Hope you are still with me... My friends, who are getting married in May, just told me that in order to afford a nice home here they took out a loan against their portion of the living family trust. Her parents had a large vacant lot in a very pricy area here that she purchased from the trust using a loan against the trust - I was really confused at this point - and he took out a loan against his portion of the family trust on his side using property in the trust as collateral, to fund building the new home on the vacant lot. I tried to get them to explain to me how the loan against the future monies to come to them via the trust worked and WHERE did the actual money generate from given that what they had was property in the trust and not cash, but they could not explain it to me. My parents would love to help me to be able to buy a home , but we are all stuck in not knowing how we might be able to use the assets held in the family trust as collateral in the form of a loan that I could use to purchase a home and then make payments back into the trust. And as far as the fear of what if something happens to me and I can't continue to pay on the loan, well I have this to say about that... my parent's home will only continue to increase in value so that if I took out a loan right now for my share of the trust being 500,000 against it, my share will be worth 525,000 next year and 550,000 the year after and so on. Likewise the property that I purchase will appreciate in value the same way and it will be worth much more that what it was bought for each year, and if for some odd reason I defaulted, then the property could be sold at a profit above what my loan against the trust was for. Is it possible to take out a loan to buy a home using my share of the trust as collateral? How do we do this if it is possible???

Any direction anyone can give will be helpfull.