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Foreigner Loan: Requirements for Getting a Mortgage in the US

The path to owning a home in the United States through a mortgage as a noncitizen is difficult, but doable.

The United States has many foreigner loan programs that noncitizens can take advantage of to get funding for a home just like a citizen. As one of the premier locations for foreign landownership, the US, in partnership with many private lenders, have created accessible and convenient pathways to this goal. Here are the requirements for anyone who is looking to take advantage of the opportunity.

What Are the Legal Documents Required?

Proof of residency is the major concern for government agencies, and there are a few documents that can prove this to grease the wheels of commerce. These documents include the Green Card, a valid US passport, an I-94 form, certain types of foreign passports with a permanent residence admission, and other relevant documents that you may receive from the United States Citizenship and Immigration Services offices.

Are the Requirements Different for Nonpermanent Resident Aliens and Permanent Residents? 

A nonpermanent resident alien may have additional requirements placed on them because of their temporary status. One of the most important aspects of lowering a risk profile to a lender is proving to that lender that you will be around to make the payments on the mortgage. From the point of view of the lender, the nonpermanent alien is a higher risk to the loan because of the possible interference from the government upon the expiration of paperwork or legal status.

Aside from a valid work visa, lenders will require some other kind of proof that a nonpermanent alien will remain in the United States for at least the next few years. If your residency is up for renewal, then you may be asked to renew it before any further consideration. Lenders will usually require form I-766 alongside form I-797A and an I-94 in order to fully consider you.

Are There Additional Requirements for a Jumbo Loan? 

foreigner loan

Lenders take on even more risk if they are considering giving a jumbo loan to a nonresident or a nonpermanent alien. The jumbo loan is more difficult for the lender to sell on the secondary market, and loans with a nonresident are even less enticing as an investment in the securities market. You will need a history of employment and residency in order to convince a lender that you are a safe enough bet to pay off a jumbo mortgage once you take it on. In most cases, you must work three years in the United States. However, a nonconforming jumbo loan will require at least five years of past work and a solid guarantee of work for at least three years into the future.

Are There Any Limitations on the Type of Property That a Nonresident Can Purchase?

Nonresident aliens are only eligible to buy unattached single family housing or condominiums. Furthermore, the owner must reside on the property. The down payment will be higher than the industry norm for a citizen: 30 percent for a nonresident as opposed to 20 percent for a citizen. There will also be additional paperwork required to validate residency including form I-140, an employment authorization card, and either an H-1B or H-2B visa.

What If I Am a Nonresident Who Plans to Be in the US for Less Than a Year?

If you are looking for a mortgage to underwrite your loan, then you will likely not be able to purchase property in the US if you are looking to leave within the course of a year.

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Are There Any Other Government Requirements? 

foreigner loan

People with diplomatic immunity may not purchase any property inside of the United States because they are not subject to US law.

What Are the Credit Requirements for a Noncitizen?

Credit requirements for a noncitizen will be more stringent because many noncitizen borrowers base their creditworthiness on foreign metrics that are harder for US lending institutions to properly track. If you have credit that is not from the United States, it will likely need to be converted into domestic credit. The preapproval process becomes very important when you are a nonresident, so having domestic credit is vital to your efforts to buy a property. Borrowers with large amounts of cash on hand or a history of transactions that can be tracked within the country may not face this restriction. If this is required of your primary lender, then you may need to find a secondary lender who can perform this conversion for you, as it is not a common occurrence.

Can I Get Government Sponsored Loans If I Am a Noncitizen?

foreigner loan

The government of the United States underwrites 97 percent of the loans that are on the US market, and these loans include those from noncitizens. The Federal Housing Administration (FHA) is a great place to start if you are looking for a government subsidy as a noncitizen. They can actually help to lower your risk profile because the lender is assured of payment if you default as the borrower for any reason.

Are the Requirements for Lenders Requirements Across the Board? 

There is a difference between the things that lenders require and the documents that are required by the government. A noncitizen who is buying a property in the US all cash will have far less scrutiny than an individual who is in need of a mortgage loan.

2 Point Highlight

From the point of view of the lender, the nonpermanent alien is a higher risk to the loan because of the possible interference from the government upon the expiration of paperwork or legal status.

The Federal Housing Administration (FHA) is a great place to start if you are looking for a government subsidy as a noncitizen.

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posted on: April 26, 2016
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