Non-US Resident Mortgage

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Many people assume that it is really hard and virtually impossible to buy property in the USA for a non-US resident. You at least have to be a green card holder, they think. But this is not so! There are many loan programs in the USA that allow foreigners to buy a house in the United States. We will discuss all the details in this article.

Can a foreigner buy a house in the USA? (FAQ)

So, here are some questions that we are often asked regarding buying a property in the USA and California.

1. Is it possible to buy a house in the USA if I do not have a green card?

The simple answer is "yes." Anyone can buy property in the USA. There are no laws in place that could prevent you from doing so. In fact, many citizens of other countries buy houses in the US to use as their vacation homes, especially in such states like California. Some foreign investors prefer to invest in the US property, so they buy not only condos or homes but business properties. So, foreigners investing in the US real estate is not rare.

2. Can I purchase property in the United States if I am a foreigner?

The answer is similar to the first one - yes, you can. If you have a full amount on your hand, this is not difficult. The main thing is that you must have the legal right to stay in the county. However, if we are talking about mortgage, there are some more complicated procedures than for US residents. Still, it is possible.

3. If I do not have a permanent US residency, can I get a mortgage?

Yes, you can, but this process is more complicated than for the US residents. You need to understand that mortgage lenders have to make sure you can pay back the loan. For this, they check a persons credit history.

If you are a US citizen, this is not a problem. If you are not, then mortgage lenders have to use other methods to evaluate you as a borrower. And not many mortgage lenders are willing to do that. It is easier for them to just deal with US citizens. So, it will take time to find a lender who will go for approving your mortgage loan. Besides, in most cases, the interest rate you need to pay will be higher.

A strategic move would be to start building up your American credit history by establishing relationships with US banks with international branches. Even if you do not have an American credit report, lenders will be more willing to deal with you if you have your financial records in the American bank abroad. Nowadays, it is pretty easy to find branches of American banks in many countries.

4. What residency status do I need to have to get a mortgage loan?

Generally, there are three groups of non-resident borrowers in the US:

  • Foreign nationals, who do not have a permanent residence in the USA;
  • Non-permanent residents who have a work visa;
  • Permanent residents who have a green card.

Obviously, it is easier to get a loan if you are in the second or third categories. For example, Fannie Mae and Freddie Mac mortgage enterprises have the same conditions as far as loans for green card holders and foreigners with work visas as for US citizens. But foreign nationals who do not have a permanent US resident status do not fall under their standards. Some lenders can give them loans, but such borrowers would have to make high down payment.

The Federal Housing Administration (FHA) is another option for non-residents. If you can prove permanent residency in the US, the FHA will offer you the same loan terms as to other buyers. For the FHA mortgage, you need to supply a valid Employment Authorization Document and Social Security number. And you need to prove that you will use this home as your permanent residency.

So, if you are a foreigner, you can become a homeowner in the USA and start living your American dream. It is crucial to make the right investment moves so your investment will be profitable for you and your family. It is better to choose a lender that often works with non-US residents and knows what to do and how to facilitate the process.

5. Can I buy a house if I do not have a Social Security number?

Unfortunately, if you want to get an FHA loan or a loan backed by Fannie Mae or Freddie Mac, you can only do this if you have an American Social Security number.

However, some lenders can give you a mortgage loan bases on the ITIN number - Individual Tax Identification Number.

To get an ITIN number, an individual must fill out the IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. For this, you need to present a document that confirms your identity (your passport).

A foreigner may apply for the Foreign National Loan Program, but it only concerns the investment properties, not the houses you are planning to live in. If you want to purchase an investment property, the down payment will be at least 25%. The interest rate will also be higher than for standard mortgages - about 7%. To buy an investment property in the USA, you will need to submit:

  • A copy of a foreign passport with a US visa;
  • A bank credit recommendation letter from your home country;
  • A proof that you have funds for a down payment.
6. Do foreigners pay more taxes?

There is no straightforward answer to this question since it depends on the current tax law and the area where you buy the property. To find out the information on your particular case, contact a Certified Tax Council.