Trust Construction Loans

Borrowing to build in a trust structure adds complexity that many lenders choose not to deal with. The trust deed must permit the borrowing, the trustee must provide personal guarantees, and the lender must be comfortable with the specific trust type. Some lenders accept simple family trusts with individual trustees; others require a company trustee. Settled Funding Group works with investors, developers, and accountant-advised clients who hold or want to build property in a trust, identifying lenders across the panel whose policy fits the structure.

Who This Is For

• •Property investors who hold assets in a discretionary (family) trust and want to build within that structure
• •Unit trust holders constructing an investment property for asset protection or tax efficiency
• •Those advised by their accountant or solicitor to borrow through a trust
• •Developers using a trust as the project vehicle for a residential or commercial build
• •Borrowers whose trust has a strong asset base but limited income at the trust level
• •Those wanting the build asset to sit in the trust from the start rather than being transferred in later

How Trust Construction Finance Works

Trust construction loans follow most of the same mechanics as standard construction loans: the loan is structured against the on-completion value of the property, funds are drawn in stages as the build progresses, and a fixed-price builder contract is typically required. The additional layer is the trust structure itself. Joseph Farhat reviews the trust deed, the trustee details, and the fund financials before identifying which lenders on the panel are suited to the specific trust type. Not all lenders accept all trust structures, and matching the right lender to the right structure upfront avoids delays later.

What Lenders Assess for Trust Construction Loans

• •Trust deed: must permit borrowing for investment property. Lenders review the deed for any restrictions on the trust purpose and the trustee's powers. An outdated or non-compliant deed is the most common cause of delay.
• •Trustee type: company trustees are preferred by many lenders over individual trustees. Some lenders will only lend to trusts with a corporate trustee. Joseph Farhat knows which lenders accept which structures.
• •Personal guarantees: all directors of a corporate trustee, or individual trustees directly, are typically required to guarantee the loan personally. This is standard across most lenders for trust borrowing.
• •Trust financials: lenders review the trust's tax returns, financial statements, and any existing liabilities to understand the overall financial position.
• •Income at trustee or guarantor level: lenders assess whether the trustees or guarantors have sufficient personal income to support the loan. Where trust income alone is insufficient, personal income fills the gap.
• •Builder contract and project: the same standard construction requirements apply: DA approval, fixed-price contract, licensed builder, and an on-completion valuation.
• •LVR and loan amount: trust borrowing does not typically attract a different LVR to individual borrowing at major banks, but some non-bank lenders apply different criteria for complex trust structures.

The Trust Construction Loan Process: What to Expect

1. 1.Initial review: Settled Funding Group assesses the trust structure, the trust deed, and the build plan. Joseph Farhat identifies lenders comfortable with the specific trust type and gives an indicative loan amount before anything is formally submitted.
2. 2.Full application prepared with trust deed, trustee details, trust financials, personal guarantee documents, builder contract, and income documentation at the trustee or guarantor level.
3. 3.Lender commissions an on-completion valuation and reviews the trust and build documentation.
4. 4.Formal approval and loan documents issued, typically two to four weeks from submission for major bank lenders, potentially faster with non-bank lenders.
5. 5.Staged construction drawdowns managed by Settled Funding Group throughout the build. The loan is held in the trust name throughout.

Indicative Finance Options

Trust Construction Loan Broker

Construction lending through a trust adds a layer most lenders handle differently. Discretionary, unit, and hybrid trusts each carry their own assessment rules, guarantee requirements, and documentation expectations, and many banks tighten policy or apply additional scrutiny when a trust is the borrower. A structure one lender declines is funded comfortably by another. Applying blind means wasted time and avoidable credit enquiries on lenders who were never comfortable with your structure. A broker who knows which lenders are comfortable funding construction through your trust type, and how they want it documented, goes straight to those with appetite, including non-bank and specialist funders most borrowers cannot approach directly.

Settled Funding Group represents you, the borrower, not the lender. Joseph Farhat reviews your trust structure, your trustee and guarantee position, and your build, then matches the scenario to the right lender from our 90+ panel and negotiates terms on your behalf. For complex trust structures or unique scenarios, we can introduce you to private finance options. We prepare and manage the application end to end, working alongside your accountant where needed. As a broker, we are typically paid by the lender on settlement, so in most cases there is no direct cost to you. If your trust structure is complex or has been declined, talk to us early and we will tell you honestly what is achievable.