Mortgage Financing for Non-U.S. Residents Purchasing Property in the United States
You do not necessarily need to be a U.S. citizen, permanent resident, or U.S. visa holder to purchase real estate in the United States.
Certain mortgage programs are designed specifically for foreign national borrowers who primarily live outside the United States but want to purchase or refinance property here.
At Capital Funding Mortgage, we welcome qualified borrowers from countries throughout the world and can help evaluate foreign national mortgage programs available through select wholesale lenders.
I’m John Madden, owner of Capital Funding Mortgage, and I have been helping borrowers with mortgage financing for more than 25 years.
Foreign national loans require a different approach from standard conventional financing. The lender may evaluate foreign income, foreign assets, passport documentation, property use, reserves, and other factors that are not normally part of a traditional U.S. mortgage.
Our goal is to help you understand those requirements before you commit to a property.
A foreign national mortgage is a specialized home loan for a borrower who generally:
These loans generally fall outside standard conventional mortgage programs.
Foreign nationals who do not have lawful U.S. residency status are generally not eligible for ordinary conventional financing and instead must use an eligible specialty or Non-QM investor program.
This distinction is important.
An H-1B or other eligible visa holder may already be legally living and working in the United States and may qualify for conventional mortgage financing depending upon the borrower’s status and lender requirements.
A foreign national borrower, by contrast, usually lives primarily outside the United States and requires a specialized foreign national mortgage program.
Capital Funding Mortgage offers information on both categories, but the underwriting requirements are very different.
Foreign national financing may be appropriate for borrowers who want to:
Available occupancy types depend upon the specific lender and program.
Some foreign national programs are primarily designed for investment properties.
Capital Funding Mortgage welcomes qualified borrowers regardless of nationality.
A borrower may be from:
Your nationality itself is not what determines mortgage approval.
The lender evaluates whether you meet the requirements of the specific foreign national program, including documentation, assets, credit profile when applicable, property eligibility, and ability to repay.
Depending upon the lender and mortgage program, financing may potentially be available for eligible:
Property eligibility varies considerably between lenders.
For example, some current DSCR programs specifically allow foreign national borrowers purchasing investment properties.
Investment property financing is one of the most common uses of foreign national mortgage programs.
Some lenders offer DSCR financing for foreign national borrowers.
A DSCR loan focuses heavily on the property’s rental income compared with its housing expense rather than relying exclusively on the borrower’s personal income.
This can be especially useful for a borrower who earns income outside the United States.
Depending upon the lender, foreign national DSCR programs may permit:
Program requirements vary by lender.
Not always.
Some foreign national mortgage programs may not require a traditional U.S. FICO score.
Instead, the lender may evaluate other information such as:
Other lenders may require an established U.S. credit profile.
This is one area where lender guidelines vary significantly.
Requirements vary by program, but borrowers should generally be prepared to provide documentation in several categories.
The lender may request:
The lender may request evidence of:
Depending upon the program, this may include:
Some investment-property programs may rely more heavily on the subject property’s rental income than on traditional personal income.
Foreign national borrowers should generally expect to document:
Statements may originate from financial institutions outside the United States.
Potentially, yes.
Many foreign national programs permit qualifying funds held outside the United States.
However, the lender typically needs to verify:
Documentation may need to be translated if it is not in English.
The lender may also apply an exchange rate when determining the U.S. dollar value of foreign assets.
If you plan to use foreign assets for your down payment or closing costs, discuss the transfer with us early.
The lender may need documentation showing the movement of funds from the foreign account into an acceptable account for closing.
This may include:
Large unexplained deposits can create underwriting questions, so maintaining a clear paper trail is important.
Foreign national mortgage programs generally require meaningful borrower equity.
The required down payment varies based upon factors such as:
Foreign national financing may require a larger down payment than standard conventional owner-occupied financing.
We can compare available programs before you decide how much capital to invest.
Foreign national lenders may require borrowers to maintain substantial reserves after closing.
Reserves can help demonstrate the borrower’s ability to make future payments.
Eligible reserves may include certain:
The exact reserve requirement varies by lender and transaction.
Foreign income may potentially be considered depending upon the mortgage program.
Documentation can be more involved than for a U.S. W-2 employee.
The lender may request:
Some investor programs may reduce the need for extensive personal-income qualification by focusing more on property cash flow.
Business owners may also qualify under certain foreign national programs.
The lender may evaluate:
Documentation standards vary widely.
If you own a business outside the United States, discuss the structure with us early so we can identify programs that may fit.
DSCR financing can be especially useful for foreign national investors.
Rather than primarily qualifying from personal income, the lender evaluates the relationship between the property’s qualifying rental income and its housing expense.
For example, a lender may consider items such as:
The exact DSCR calculation and minimum requirements vary by lender.
Some current wholesale DSCR programs specifically allow foreign nationals and certain short-term rental properties.
Some investor mortgage programs may allow the property to close in an eligible LLC or other business entity.
This can be attractive to real estate investors.
However, lender requirements can include:
Entity requirements should be reviewed before forming or changing an LLC solely for the mortgage transaction.
Capital Funding Mortgage does not provide legal or tax advice, so borrowers should also consult their own attorney or tax professional regarding ownership structure.
Some lenders may require or strongly prefer a U.S. bank account for:
Other programs may provide different options.
We recommend establishing the required banking relationships well before closing when possible.
Not all foreign national mortgage programs require a Social Security number.
Some specialty programs may permit borrowers without one.
Depending upon the transaction, an ITIN or other taxpayer identification may be required.
The specific requirements depend upon the lender, loan structure, and how the property will be owned.
Foreign national and ITIN loans are not necessarily the same thing.
A foreign national borrower may primarily live outside the United States.
An ITIN borrower may live and work in the United States but use an Individual Taxpayer Identification Number rather than a Social Security number.
These borrowers may require different mortgage programs.
We can determine which category more accurately fits your circumstances.
Foreign national mortgage rates and costs are generally different from standard conforming mortgage pricing.
Pricing may depend upon:
Specialty mortgage programs may carry higher rates or costs because they involve different underwriting risks.
We can compare the available options and explain the complete rate-and-cost structure before you proceed.
Certain business-purpose or investment-property foreign national loans may include a prepayment penalty or prepayment provision, depending upon the program and applicable law.
This is extremely important to understand.
Before selecting a mortgage, you should know:
We will review the loan terms with you before closing.
Foreign nationals frequently purchase condominiums, particularly in vacation and investment markets.
In addition to qualifying the borrower, the lender may need to evaluate the condominium project.
Issues can include:
If a condominium does not meet standard requirements, specialized condo financing may sometimes be available.
Capital Funding Mortgage can help eligible foreign national borrowers evaluate mortgage options for qualifying properties throughout the areas we serve in Pennsylvania.
This may include properties in:
Investment-property opportunities, universities, businesses, and international communities can make Pennsylvania attractive to overseas buyers.
We also help borrowers evaluate foreign national financing for eligible properties throughout New Jersey.
Potential transactions may include:
Property use and lender requirements must be reviewed before determining which program is appropriate.
If you are a foreign national interested in purchasing U.S. property, it is helpful to have the following information available:
You do not necessarily need every document before speaking with us.
An initial review can help determine what the lender is likely to require.
Foreign national financing is highly lender-specific.
One lender may accept a borrower with:
while another lender may not.
As a mortgage broker, Capital Funding Mortgage works with multiple wholesale lenders, including lenders that may offer specialized Non-QM and investor financing.
That allows us to identify potential options based upon your particular circumstances rather than relying upon a single bank’s guidelines.
A Canadian investor buying a Pennsylvania rental property may have different financing needs from a European borrower buying a New Jersey vacation property.
Likewise, an experienced international investor may qualify differently from someone making their first U.S. real estate purchase.
We look at:
before determining which financing may be appropriate.
If you live outside the United States and are considering purchasing or refinancing qualifying residential property in Pennsylvania or New Jersey, contact us before assuming that U.S. mortgage financing is unavailable.
We can help evaluate:
Contact John Madden at Capital Funding Mortgage to discuss Foreign National Mortgage Loan options in Pennsylvania and New Jersey.
With more than 25 years of mortgage experience and access to multiple wholesale lenders, our goal is to help qualified international borrowers understand the financing available for U.S. real estate.
Capital Funding Mortgage
International borrower. U.S. property. Specialized mortgage solutions.
