U.S. Mortgages for Non-Residents

You may consider buying U.S. properties for their investment potential or as part of immigrating to the U.S. Whether you have moved across the world or come from Canada or Mexico, for many, a key part of feeling at home in the U.S. is putting down roots in the form of property ownership. The good news is that you don't have to be a U.S. citizen or resident to buy a property. Better yet? You can get a mortgage to help with property costs. Read on to understand U.S. mortgages for non-residents here. 

Can Non-Residents Get a U.S. Mortgage?

Yes, it’s possible to get a U.S. mortgage as a non-resident. However, it may take some extra work. Documentation and mortgage possibilities will depend, in part, on your residency status. While it is easier for residents or green card holders to get a mortgage, you can also get a mortgage with a valid work visa as a non-permanent resident. In addition, you can get a  Federal Housing Administration (FHA) loan with the same terms as resident buyers, if you meet specific conditions. 

Many banks and mortgage companies offer conventional and FHA loans to non-residents and non-U.S. citizens. To qualify, you must verify your residency status, work history and financial history, including income and total debt. 

Some lenders work extensively with non-residents or recent immigrants and tend to be more flexible with the documentation needed. By building a relationship with a U.S. bank and establishing a U.S. credit history, you'll have an easier time applying for a U.S. mortgage. 

How to Qualify for a U.S. Mortgage for Non-Residents

The requirements for a U.S. mortgage loan for non-residents vary by lender. However, general requirements are usually similar. 

You'll need:

• A government-issued ID such as a foreign passport, U.S. visa or driver’s license
• A U.S. Social Security number 
• Proof of income, such as pay stubs, tax returns or bank statements from U.S. or foreign banks
• Proof of assets, including properties, retirement accounts and investment accounts
• A U.S. credit score with a minimum score of 620 or higher

Permanent vs. Non-Permanent Residency

Whether you can easily qualify for a mortgage in the U.S. will partially depend on your residency status. You're considered a permanent resident with a green card. You fall into the non-permanent resident category with a valid work visa, including E1, E2, H1B, H2A, H2B, H3, L1 and G1-G4. 

If you don't have a visa or primary residence in the U.S., you're considered a foreign national, which makes it more challenging to secure a mortgage.

4 U.S. Home Loans for Non-Residents

The four most common types of home loans for non-residents are conventional loans, FHA, USDA or VA loans. The only exception is if you have full diplomatic immunity. In that case, you can’t qualify for a mortgage because you’re not subject to U.S. law. In all other cases, choose from the following options. 

Conventional Mortgages

As a non-resident, you can apply for a conventional mortgage. If you're purchasing a single-family home as your primary residence, you may only need a downpayment of 3%, making it an attractive option. If you can make a larger down payment or at least 20%, you won't have to pay for private mortgage insurance (PMI). 

If you work with a mortgage lender covered by Fannie Mae or Freddie Mac, you’ll need one to two years of documented work history. You'll also need a minimum U.S. credit score of 620, although a higher credit score can make qualifying easier. Interest rates vary by market rates, but you could save on interest and fees if you get a conforming conventional mortgage. 

FHA Loans

FHA, or Federal Housing Administration loans, are government-backed loans that non-residents may qualify for. You don't need a perfect credit history. In fact, you can get a mortgage with a credit score as low as 500. The median FICO score for FHA loans was 620. 

To qualify, you'll need to show your work history. The FHA accepts documentation of employment abroad if you don't have a U.S. work history. 

You'll also have to pay upfront for mortgage insurance and continue with monthly mortgage insurance payments. If your down payment is less than 10% of the loan value, you'll have to make mortgage insurance payments for the duration of the loan.

USDA Loans

A USDA loan could be a good option if you live in a rural area or on the outskirts of the suburbs. To qualify, you need to make less than 115% of the area median income for your area and household size. One major benefit is that you don't have to make a down payment. However, you will need to meet income and location restrictions.

You'll also have to make upfront and monthly guarantee fee payments. These are lower than FHA mortgage insurance payments, but they last for the life of the loan.

USDA loans are only available to permanent residents. You'll need to show two years of work history and, ideally, have a FICO score of 640 or higher, although you could qualify with a score as low as 620.

VA Loans

VA loans are government-backed loans offered by the Department of Veterans Affairs. VA loans are available only to active-duty service members, reservists, veterans and spouses who meet VA criteria. For that reason, they're a less common mortgage option for non-residents. 

If you meet VA criteria, VA loans require no down payment and have some of the lowest interest rates and fees of available mortgages. 

To qualify, you'll need to show your Certificate of Eligibility and proof of two years of work history. The minimum required credit score is 500, but aiming for at least the median of 580 can increase your chances of qualifying. 

VA loans don’t have mortgage insurance, but it has a funding fee that you will need to pay upfront or over the loan's lifetime.

Types of Properties a Non-Resident Can Buy in the U.S.

Non-U.S. residents can purchase any property, from single-family residences to apartments, condos or commercial properties. You could purchase multi-unit apartments or condos and large properties such as shopping malls. 

Application Timeline for U.S. Mortgages for Non-Residents

The application timeline for non-U.S. residents to get a mortgage is similar to that of U.S. residents. You must prove two years of work experience and provide all required documentation. If you don't have a U.S. credit history, building a credit history can increase your chances of approval. You can build a credit history in a few months to a year. 

Tax Implications for Non-Residents Who Own a Property in the U.S. With a Mortgage

The tax implications for non-residents are similar to those for residents. The main exception is in income treatment. If you rent the property and earn income from the property, you will have to file an income tax return in both the U.S. and in your home country, according to the appropriate laws of both countries and any applicable treaties. 

Generally, income from real estate in the U.S. owned by a non-resident is usually taxed at a flat rate of 30% unless it is effectively connected to a U.S. trade or business. However, you should speak with a certified public accountant to confirm correct tax filings in your individual situation. 

Final Tips on Buying a U.S. House for Non-Residents

Whether you're planning to live in the U.S. long-term or want to buy a U.S. investment property, it's possible to get a mortgage to fund your purchase. A U.S. visa, credit history, low debt-to-income ratio and proof of both income and assets can increase your chances of approval. Remember to shop around. You only need one mortgage approval to buy your new U.S. home. Ready to get started? Learn more about the mortgage process, get essential tips for first-time homebuyers or learn how to buy your first rental property here. 

Frequently Asked Questions