Can Foreigners Buy Property in USA?

Foreigners Buy Property in USA

If you’re from Hong Kong, Singapore, China, or even India, real estate prices have increased beyond the point of where you can maintain a positive yield, but this isn’t true in the USA. So, can foreigners buy property in USA?

Yes, but no one said that trying to buy a home in America as a non-U.S. citizen, resident, or foreigner isn’t going to be tricky, at least initially.

If you’re wondering whether a non-resident can buy US real estate, the short answer is “yes”, but it’s easiest if you pay cash. If you need financing to purchase US real estate as a non-citizen, getting a mortgage is challenging, which is why America Mortgages ONLY specializes in these types of mortgages.

Can Foreigners Buy Property in USA?

Anyone may buy and own property in the United States, regardless of citizenship. Hong Kong, Singapore, China, Indonesia, and other countries in Asia focus on the U.S. when investing in real estate. Since there are no laws or restrictions that prevent individuals with foreign citizenship from purchasing or owning property in the USA, it is the perfect place to invest.

Besides investment in real estate, many foreign nationals /non-US residents purchase vacation homes in the United States. Many wealthy foreign investors purchase investment property such as multi-unit apartments or condos, single-family homes, and even business properties like shopping malls.

Getting a US mortgage as a non-resident

Purchasing a house in the U.S. as a foreign citizen is simple if you plan to pay in cash (or having all the money saved to buy the home in one lump sum). If you’re not in the financial position to purchase a home with cash or find leverage is a better option for you, you’ll need to obtain a mortgage loan to purchase a property. This is where the process becomes tricky. Fortunately, America Mortgages’ primary focus is on the U.S. market, and its only focus is these types of mortgages.

Most U.S.-based mortgage lenders look at a borrower’s U.S. credit history to determine their eligibility for a mortgage loan. As a non-U.S. citizen, you don’t have a U.S. credit report, making it difficult for lenders to analyze the risk of loaning you money to purchase a home. That means your lender will elevate your risk factor as a borrower. This doesn’t have to be the case. Nor do you have to stay up late at night in Asia, calling lenders, brokers, and banks trying to find someone that will understand your situation. It may take you longer to find a lender who is willing to work with you, and it may take longer to get approval for your mortgage loan. You might also pay a higher interest rate.

We understand the complexity of analyzing risk, calculating foreign income, and alternative sources of acceptable credit verification. We do it all day, every day. It’s not difficult if you know the terrain, and in most cases, we can find a U.S. mortgage loan for every client.

Implications for Selling a U.S.-based Property as a Foreigner

Eventually, you might decide to sell your U.S.-based property. Before you purchase property in the U.S., it’s good to be aware of the rules and requirements should you choose to sell your property in the future. The IRS requires that buyers of property from foreign citizens withhold 15% of the amount realized on the disposition. If the buyer does not withhold this amount, they may be responsible for additional taxes. The rules surrounding this are somewhat complex but are outlined in the IRS FIRPTA publication, and more information can be found in the International Tax Gap Series.

It would be best if you worked with an agent you trust who won’t push you beyond what you’re comfortable offering or rush you into making a bad decision. Although we do not sell Real Estate ourselves, our network within the Real Estate world, especially within the U.S., is not only strong but also vetted. We are happy to point you in the direction of agents we have worked with in the past.

One of our associates or partners will be happy to answer any questions you may have regarding mortgage financing for your investment.

For more information, please contact [email protected].

U.S. advertising executive in Manila refinances apartment in Newark, New Jersey.

mortgage for overseas property

The Client

The client wanted to take advantage of buying out his business partner but didn’t have the cash on hand. He lived in Manila for over ten years and didn’t know if he had any credit or a score.

How We Helped

Lucky for the client, he had enough credit to get into one of our bank programs, which gave him the ability to extract up to 80% equity out of the property giving him sufficient funds to buy out his business partner and expand into a new market.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen$450,000$360,00080%3.65%
TermStateProperty TypePurposeLoan Type
30 year fixedNewark, New JerseyApartmentRefinanceResidential

U.S. Expat in Tokyo buys an apartment in Boston as a second home.

mortgage specialists international

The Client

Since our client had business monthly in Boston, buying a home there seemed to make sense rather than staying in a hotel.

How We Helped

With only 20% down, no W2 income, and self-employed tax returns, we were able to get the loan closed in 30 days.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen$887,000$709,60080%2.75%
TermStateProperty TypePurposeLoan Type
30 year fixedBoston, MassachusettsApartmentPurchaseResidential

75% LTV U.S. Foreign National Loan.

U.S. Foreign National Loan

Qualifying as a non-citizen has never been easier.

Before you read about our 75% LTV loan program, we would like to note a few differences between U.S., Asia, and European mortgages. In the U.S., mortgages work differently than the mortgages in most of the other countries:

  • There are NO age restrictions
  • The buyer can be 85 + years old and eligible for 30 years mortgage term
  • For our 75% LTV loans, the asset is the determining factor, and not the borrower’s income
  • Life insurance is not required
  • NO pre-payment or redemption penalty
  • No tax returns or liquid reserves are required
  • In many cases, the seller is allowed to pay up to 3% of the purchase price for buyers closing cost

Our minimum 30% down payment foreign national mortgage program enables foreign nationals, non-U.S. residents, or employment transferees to place a minimum 30% down payment and finance up to 75% of the property value. Most of the lenders still require a 50% down payment to obtain a foreign national mortgage loan, but we can arrange financing with as little as 30% down.

Seller or developer can give the buyer up to 3% of the purchase price concession towards the closing cost and or prepays. If that is the case, most of your closing costs would be covered, and you’ll be able to invest less money upfront. The borrower must have verifiable funds for the down payment, closing cost in a verified financial institution in or outside the U.S. Any foreign language accounts would need to be translated and certified by a translation company.

Our 75% LTV mortgage for foreigners does not require Private Mortgage Insurance (PMI), so there is no extra cost. We also offer rate and term foreign national mortgage refinancing with often unlimited cash-out option (restricted by loan limits).

This foreign national refinance mortgage is available as a fixed and or adjustable-rate mortgage. Adjustable rates are 5/1, 7/1 term for 15 or 30 years fully amortized loan. In some cases, interest-only is also available.

Here are some of the loan program features:

  • Minimum 30% down Payment
  • 5.75% Interest rate (right now. Does not include APR)
  • The term: 30 years, 20, and 15 years fixed
  • Loan amounts up to $5M
  • No pre-payment penalty
  • Up to 3% seller contribution towards buyers closing allowed
  • 1- 4 unit single-family residential property eligible
  • Condos eligible
  • 72 hours for underwriting
  • Closing on average 45 days

Here are the requirements for our foreign national loan program:

  • Copy of executed purchase agreement
  • Copy of passport
  • 2 personal Credit References (Credit card, Mortgage, Car lease, Landlord Letter, Utility bill) OR International credit report
  • Last 2 months bank statements showing enough
  • U.S. mortgage application

For more information please visit us online or email us at [email protected].

A Real Estate investor from Canada purchases a retail complex in California.

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The Client

The client had come to us from an online search and told us that he spent 4 months working with traditional commercial lenders with the hopes of obtaining financing for their retail purchase.

How We Helped

Unfortunately, the lender always came back requesting more information, most of which our client did not have, due to not being a U.S. Entity or beneficial owners who are not U.S. Citizens.

We have worked closely with our lending partners over the past 5 years to create financial solutions to accommodate international investors and can structure and underwrite the loan with the information available.

We were able to secure a non-recourse 5-year commercial real estate loan for the purchase of the property with 60% leverage. (Also see Can a Canadian Buy a House in the USA?)

Loan Details

NationalityProperty ValueLoan AmountLTVRate
Canadian$4,100,000$2,460,00060%4.99%
TermStateProperty TypePurposeLoan Type
5 year fixed loan /
25 year amortization		San Jose, CaliforniaRetailPurchaseCommercial

America Mortgages PrimeSelect For U.S. Expats With Foreign Income.

America Mortgages Prime

Are you a U.S. Expat living abroad, filing U.S. income tax, but earning income from your overseas assignment? If you answered YES, we created a U.S. Home Loan Mortgage program specifically for you! America Mortgages PrimeSelect allows you to use two years of your U.S. tax returns, along with your monthly foreign income, to qualify just as you would if you were back home in the U.S.

The credit crunch, which was primarily caused by the U.S. banks’ cavalier attitude to mortgages and other loans, has paid for the previous days of easy credit. It is now much more challenging to obtain a mortgage from a U.S. lending institution. For example, guidelines introduced in January 2013 encouraged lenders to demand full documentation from potential borrowers and to be more precise about the consequences of low early repayment rates.

As an expat, you will find getting a mortgage even more difficult. Many lenders will not even consider lending to foreign income earned, so you would need to be persistent and shop around. Note that, as in many cases, mortgage programs may vary from state to state. With America Mortgages PrimeSelect, you are now able to purchase U.S. Real Estate as an investment, second home, or if your intention is moving back to the United States, owner-occupied at prime rates, terms, and programs.

Requirements

You will need to prove that you have sufficient employment and enough funds to repay the loan. Bear in mind that the more cash you have readily available to pay for a deposit, the broader choice of mortgage you will have. America Mortgages PrimeSelect will allow up to 90% financing for a second home purchase.

America Mortgages PrimeSelect mortgages are ‘fully documented,’ meaning you will need to prove your income by supplying two years of U.S. tax returns. In addition to this, you will also need to show your last two months’ bank statements to show you have money sufficient to cover both down payment and closing costs. We will also require one month of pay statements in the country you are working in. If these accounts, pay, and banking is in a language other than English, it will require a professional translation.

Here are the requirements:

  • – Two years of U.S. Tax returns
  • – Two months bank statements (foreign okay)
  • – One month of pay statements
  • – Passport or drivers license
  • – Social security card
  • – U.S. credit score (FICO)

Debt to Income Ratio

Most lenders will want your debt-to-income ratio to be no more than 35%. America Mortgages PrimeSelect will allow up to a 45% ratio. This is somewhat aggressive but often needed due to the fluctuation of the U.S. dollar to other currencies. LTV (Loan to Value)

Unlike many programs that restrict LTV for U.S. Expat foreign earned income, America Mortgages PrimeSelect Loan-to-value ratios are generally around 80-90%. The maximum full term is 30 years, regardless of age.

Mortgage Types

A wide range of mortgage products is available for U.S. expats looking to purchase or refinance U.S. Real Estate. Mortgages can be variable or fixed-rate, with flexibility over the fixed-rate term. In addition to the standard principle and interest U.S. mortgage loans, there are also interest-only mortgages, allowing for more cash-flow. As most of these loans do not have pre-payment penalties, you can pay towards the principal at will.

Do you have the income but doesn’t show on your U.S. tax returns? No problem either, America Mortgages StatedSelect allows you to only state your income. We will not request or require proof of income, including tax returns or monthly pay statements. LTV and rates vary for these programs, but qualifying can be extremely simple.

One of our associates or partners will be happy to answer any questions you may have regarding America Mortgages’ various loan programs.

Please send us a message at [email protected].

What is the ‘Down Payment’ in a real estate purchase?

advisor mortgage group

Your down payment is the first payment you make on your mortgage loan. For example, if your house is worth $150,000, the lender requires you to pay a portion of that price upfront, called the down payment. Typically, it could be anything between 20% to 50% of the asset’s price. So, at 20%, you have to pay $30,000 in advance to obtain the loan. Most financial institutions make it obligatory for the borrowers to pay the down payment.

You can pay the down payment from your personal savings or other legal sources. This payment for a home purchase is possibly the biggest single cash expenditure in most people’s lives.

To obtain competitive mortgage rates, you’ll need to pay at least 20% to 25% of your home’s purchase price in a down payment. Some financial institutions require the borrowers to pay a mandatory minimum deposit in addition to the down payment.

Mortgages are price-sensitive, so one with a lower down payment has higher risk factors, which will warrant a higher interest rate. Plus, a low down payment can cause you to pay for private mortgage insurance. So, to get the best option at a reasonable interest rate, be prepared to pay out of your pocket in advance.

To get an overseas loan from America Mortgages as a Foreign National, you will be required to pay only 25% in down payment. U.S. Expats get an unbelievably lower rate, which can be as little as 10% in down payment.

U.S. fashion designer living in Sao Paulo buys a second home in Miami.

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The Client

An up and coming fashion designer with dual Brazilian and U.S. passports wanted to buy a home in Miami, where she grew up. She is self-employed and therefore it doesn’t show on her U.S. tax returns her true ability to service the loan.

How We Helped

For self-employed clients, showing the ability to repay the debt can be challenging. Although the tax returns may not reflect her ability to repay the loan, her cash-flow is significant. We were able to find her a loan that did not require any tax returns and went strictly off the cash-flow (rental amount) from the property.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
U.S. Citizen$1,725,000$1,380,00080%4.50% interest-only payments
TermStateProperty TypePurposeLoan Type
5/1 ARMMiami, FloridaSingle-Family Residence (SFR)PurchaseResidential

Hong Kong investor buys retail complex in Boston.

America mortgages

The Client

A real estate investor from Hong Kong purchased a retail complex with a credit anchor tenant.

How We Helped

As a Foreign Entity, the borrower has traditionally purchased their U.S. real estate in cash due to the struggles of obtaining financing with no U.S. credit or tax returns. This is a typical client scenario for America Mortgages and with lenders that will focus on the cash flowing real estate, the borrower was able to keep a large position of their cash and utilize a commercial loan.

We were able to secure a non-recourse 7-year commercial real estate loan for the purchase of the property with 65% leverage.

Loan Details

NationalityProperty ValueLoan AmountLTVRate
Hong Kong
Investment Company		$4,200,000$2,730,00065%4.875%
TermStateProperty TypePurposeLoan Type
7 year fixed loan /
20 year amortization		Boston, MassachusettsRetailPurchaseCommercial