When creating a trust, you likely have a specific goal in mind. How the trust accomplishes that goal depends on the terms that you put in place. Those terms define how the money can be used.
For instance, some people who have trusts in their name want to use them to buy homes. They may use the trust to directly buy the house so that the trust owns it, or they may request a loan from the trust so that they can use that money to pay for the house, rather than a mortgage. They may also just get to use the money without it being a loan so that they can buy the house outright.
The advantages of doing this are many. It’s often faster to get the money from a trust, whereas it can take weeks or months with a bank. Someone who doesn’t want to miss out on a house that looks like it will sell quickly could have a serious edge if using a trust. Even with a loan, the interest rate for the trust could be far lower than the interest rate from a traditional lender. This can save the person money even if they have to pay back what they borrowed.
The key, for the person setting up the trust, is just to specify very directly that the money can be used for a home purchase. They also want to specify how: Through payments, loans or direct purchases. The rules of a trust have the ultimate control over the money, and it’s something that must be considered in advance by the person takes the legal steps to create the trust initially.