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How to buy a house in the US as a non-US citizen

How to buy a house in the U.S. as a non-U.S. citizen

Peter Warden The Mortgage Reports Editor September 9, 2022 - 11 min read

Can a non-U.S. citizen buy a house in America?

It’s totally legal for a foreign national (someone who’s not a U.S. citizen) to buy a house in America. In fact, foreign buyers purchased almost 100,000 homes in the U.S. from April of 2021 to March of 2022. That’s about 2.5% of homes sold during that time.

Eligible home buyers include green card holders, nonpermanent residents, refugees, asylum seekers, and DACA recipients. As long as you can qualify for the mortgage, you can likely buy a home. However, there may be special rules attached when buying as a non-U.S. citizen. Here’s what you need to know.

Verify your home buying eligibility. Start here (Sep 13th, 2022)

In this article (Skip to…)

  • Residency rules

  • Documentation

  • Green card holders

  • Nonpermanent residents

  • Refugees and asylees

  • DACA recipients

  • Building U.S. credit

  • Advice for buyers

Foreign national mortgages: Residency is key

Buying a house is easier for borrowers who have a green card or a valid visa that allows them to live in America. That’s because lending to legal residents is usually less risky for mortgage companies.

Imagine what would happen if someone living in another country defaulted a U.S. mortgage. Yes, the mortgage agreement itself would fall within the jurisdiction of an American court. But the expense of hiring international lawyers to enforce U.S. judgments and collect any money owed would be excessive.

So if you want to buy a U.S. home as a foreign national, it’s important to have documents verifying that you live or work here legally.

How residency status affects your home loan

There are three main categories of non-U.S. citizens who can live in the U.S. legally. These categories will affect your eligibility and the documentation you’d need to get a mortgage loan.

The three categories of non-U.S. citizens are:

1. Lawful permanent resident (LPR)

A lawful permanent resident is someone who holds a “green card.” Green card holders may apply for home loans just like citizens. Lawful permanent residents can use their green card as proof of residence to get financing and buy a home in the U.S.

2. Nonpermanent resident alien

Nonpermanent resident aliens are non-citizens who have legal authority to live and work in the U.S., usually on a temporary basis. But “temporary” is a flexible term, and some remain residents for many years with this status.

Nonpermanent resident aliens can apply for a home loan using a work permit or other visa in their passport, and a valid Social Security number. Before applying for a mortgage, be prepared to document how long you can legally live and work in the U.S.

3. Refugees and asylees

According to the Department of Homeland Security, refugees and asylees are, “unable or unwilling to return to [their] country of nationality because of persecution or a well-founded fear of persecution.”

Refugees and asylees can apply for a green card after one year of residency. But they can also apply for a mortgage with a Form I-94A, or other official residence or employment documentation.

Check your home buying options. Start here (Sep 13th, 2022)

Getting a mortgage as a permanent resident (green card holder)

Assuming you’ve built some U.S. credit, getting a mortgage as a foreign national with a green card should be straightforward.

You will have to show your green card to your loan officer when applying for a mortgage. But aside from that, lending requirements and documentation are the same as they’d be for any U.S. citizen buying a home.

Keep in mind that mortgage requirements and interest rates vary from one lender to the next. As a rule, you’ll get the best mortgage rate with a high credit score, big down payment, and few existing debts. That applies equally to U.S. citizens and foreign nationals alike.

Documentation required to get a mortgage with a green card

Your green card isn’t the only document you’ll need to buy a home in the U.S. Lenders enforce strict documentation guidelines for foreign home buyers as well as U.S. citizens. You’ll have to provide paperwork supporting all the information you list on your home loan application.

Be prepared to document you:

  • Identity: Your passport and green card, but also proof of your current U.S. address

  • Employment: Your latest two or more pay stubs

  • Self-employment: If you’re self-employed, prepare to show at least the last two years’ tax returns and possibly your (or your business’s) accounts for the same period, certified by an accountant

  • Assets: Recent statements that show your savings, investments and retirement accounts. If you own other real estate, you’ll need documents that prove that. You may be asked to show the source of recent deposits

  • Liabilities: Bank statements covering the last two months, which should reveal your outgoings on debts

  • Personal circumstances: Court documents that detail any divorces, plus any alimony and child maintenance obligations you have

If your lender has reason to doubt anything on your application — or simply needs clarification — your loan officer can request as many documents as it wishes before advancing you your mortgage.

If you’re newly arrived in America, some of those documents may be in the language of your last place of residence. Unless that’s English or Spanish, your lender may ask you for certified translations and currency conversions into U.S. dollars.

>> Related: How to apply for a mortgage: Your documentation checklist

Loan types available to permanent resident aliens

You may be getting the impression that buying real estate with a green card is a lot like buying a house as a U.S. citizen. And you’d be right.

You’re even eligible for the same mortgage programs. That includes loans backed by the U.S. government (like FHA or USDA loans )and conventional loans that conform to Fannie Mae and Freddie Mac’s rulebook.

You could potentially get a home loan starting at zero to 3% down payment, depending on where you buy and which loan you qualify for.

Getting a mortgage as a non-permanent resident alien (without a green card)

If you skipped the last section on the grounds that you’re a foreign national who doesn’t have a green card, you need to go back and read it. Because almost everything it says applies to you, too.

The only thing that doesn’t apply is the bit about showing your green card. Instead, you’ll have to show a valid visa (often a work visa) that gives you the right to live here. You may also have to prove that your employment will last for the foreseeable future.

Special rule for U.S. home buyers with a work visa

Lenders must verify that a foreign national’s right to reside in the U.S. is going to last for at least the next three years. The exact length of residency can be hard to pin down. So lenders will often take the fact that you have a valid visa as sufficient verification.

However, if you have less than a year on your current visa, the lender may ask your employer to confirm that it intends to keep you on the job. Then, it’s up to the lender to determine whether or not it believes you’ll be in the U.S. at least another three years.

FHA loans for work visa holders

If you’re a non-permanent resident alien applying for an FHA loan (a mortgage backed by the Federal Housing Administration), a special rule applies.

Since your current visa doesn’t prove you’ll be able to stay for another three years, the lender has to make further inquiries. It may check with your employer and U.S. Citizenship and Immigration Services.

The good news is that there’s an exception to this exception: As long as you’ve had your visa or work permit renewed at least once, lenders aren’t obliged to make those inquiries.

It may be easier to buy with a big down payment

There’s another exception to all this. Foreign nationals who don’t reside in the U.S. may get a mortgage more easily if they have a bigger down payment (think 25% to 50%).

However, they tend to have to borrow from lenders that operate in a small but flourishing specialist sector. For example, Britons buying vacation and investment homes in Florida are well-served even if they live in the UK.

But these specialist lenders often require a down payment (“deposit,” in British English) of roughly one third to one half of the purchase price. Though you may find lenders willing to go as low as 25 percent.

That’s a far cry from the low- and no-down payment mortgages available to many green card holders and U.S. citizens. And you’re unlikely to be offered a mortgage rate that’s as low as a similarly qualified American borrower could get.

Check your home buying options. Start here (Sep 13th, 2022)

Mortgages for refugees or asylees in the U.S.

It’s possible for an asylee to get a mortgage in the same way someone with a green card or a residency visa does. But you’ll have to show the lender a different type of documentation. Specifically, you need to provide one of the following:

  • Your employment authorization document

  • Your Form I-94A , which must carry a current and valid employment authorization stamp

  • Another official document issued by U.S. Citizenship and Immigration Services that confirms your employment and residency rights

Just to be clear, any one of those should be enough. And you do not need two or all three.

Refugees and asylees: What’s the difference?

That last section referred to asylees rather than refugees. That’s because Homeland Security says a refugee becomes an “asylee” the moment he or she is on U.S. soil.

If you think of yourself as a refugee but are living in the U.S. legally, the previous section applies to you, too. But if you’re living elsewhere, you’ll likely encounter some real issues if you try to apply for a mortgage from abroad.

Check your home buying options. Start here (Sep 13th, 2022)

Home loans for DACA recipients

Back in March 2019, Fannie Mae issued new guidelines for non-citizen borrower eligibility. That includes home buyers who are in the DACA program.

Of course, Fannie’s guidelines only apply to lenders who make “conforming" home loans. But it’s highly likely that many lenders will adopt these rules — or something very similar — as their own policy.

Fannie Mae lending guidelines for DACA recipients

In brief, Fannie Mae’s new lending rules are good news for Dreamers. Fannie states that those who have current leave to live here remain eligible to apply for a mortgage.

The most common documentation DACA recipients would use to apply for a home loan includes:

  • Employment authorization document with C33 category and either

  • An individual tax identification number (ITIN) or

  • A Social Security number (SSN)

Of course, you’ll also have to meet the employment, credit, income and other criteria that U.S. citizens face when buying a home. But the guidelines also gave individual lenders a great deal of discretion. Each lender can “decide what type of documentation is appropriate.”

So if you find that the mortgage lender is blocking your application, hunt around for another that’s more sympathetic.

Can DACA recipients get FHA loans?

Yes. Policy changes in 2021 opened FHA loans to DACA program participants. FHA loans help borrowers with lower credit scores — as low as 580 — get loans with only 3.5% down and competitive interest rates. FHA loans finance only primary residences.

To apply for an FHA loan, DACA recipients must have a Social Security number and work eligibility. The FHA requires DACA borrowers to show work eligibility via an Employment Authorization Document (EAD) from the U.S. Citizenship and Immigration Services.

Politics, DACA, and home loans

If you’re a Dreamer, you’ll be acutely aware of the political squabbles that have surrounded the DACA program in recent years. President Obama launched the program in 2012. After taking office in 2017, President Trump pledged to eliminate the program.

In 2020, a 5-4 vote of the U.S. Supreme Court preserved DACA. But since the program is still an administrative policy — and not a law enacted by Congress — DACA remains vulnerable to future legal challenges and policy changes.

Future legal changes to DACA could cause Fannie and all others in the mortgage industry to change their policies. Indeed, Fannie explicitly says, “As with all Fannie Mae policies, subsequent changes to the law and its application may cause us to reevaluate our policy on this matter prospectively.”

Check your home buying options. Start here (Sep 13th, 2022)

Foreign home buyers and U.S. credit

If you’re a foreign national, you need to prove your residence or employment status to buy a home in the U.S. But that’s not where it ends.

Just like a U.S. citizen, you also need to prove you’re a credit-worthy borrower who a mortgage company can trust to pay back their loan. Often, that means having a U.S. credit score.

The vast majority of U.S. citizens and residents build up credit histories without even realizing they’re doing so. Every time you borrow money from a mainstream lender, your application and subsequent payments end up on your credit report automatically.

If your credit report shows you’ve consistently paid all your debts on time, you’ll have a higher credit score. And that gives mortgage companies the confidence they need to fund your multi-thousand-dollar home purchase.

Credit challenges for foreign nationals

Over time, Americans typically build up a credit score by using their credit cards and paying down loans like student loans and auto loans. But for those who have never borrowed or rarely used credit in the past, getting a mortgage can be more difficult.

Home buyers with no credit history have a hard time proving that they’re responsible borrowers. In the finance industry, this is called having a “thin file” — because the borrower’s report contains so little information.

Pretty much all foreign nationals arrive in America with thin (or no) credit history. And that can be a circular problem: Banks don’t want to lend to you because you don’t have a credit report. But you can’t get a credit report until someone lends to you.

Building U.S. credit as a foreign national

There are ways to build credit after moving to the U.S. But they require patience. You’ll likely need to make credit card payments or finance another large item responsibly to build credit over time. And you’ll need to find a source to borrow from that accepts applicants without any prior credit.

With luck, you might find a store card issuer that will give you an account. Or maybe a specialist “bad-credit” auto lender that will approve your application. Or you could get a secured credit card or a credit builder loan — products that don’t extend actual credit but exist to help you add positive data to your credit file.

If you manage to get approved for an unsecured loan, expect to pay a high interest rate the first time around. Maybe your best bet is to make a very large down payment on a car, or other item, so you’re borrowing (and paying that high interest on) only a small sum.

Your monthly payments will help build a positive credit history. And, provided you pay on time every time, you should build a reasonable credit score over the course of a year or so. Then you can gradually increase your borrowing from other lenders and, eventually, build a strong credit score that will help you buy a home more easily.

Consider a bigger down payment

Even getting to the first step for a mortgage (getting an application approved) is likely to take at least a couple of years. And it may require considerably longer to build up the sort of high credit score that will earn you the best deals on a home loan. However, you may get a better deal, regardless of your score, if you can make a large down payment on the home you’re buying.

Look for a lender that will consider foreign credit histories

For some foreign nationals, there may be a shortcut to getting a low-rate mortgage. That’s because a few lenders have started to offer to check newcomers’ credit histories in their home countries. And to use those as a basis for their lending decisions.

This is still new and rare. But, for example, global bank HSBC says on its website: "International borrowers with qualifying documentation do not need U.S. credit history to apply for an HSBC mortgage. We may order an international credit report for your application."

But what’s “qualifying documentation?” Well, presumably the bank is referring to your green card. Or the visa that gives you the right to live here.

Advice for foreign national homebuyers

Regardless of your residency or citizenship status, buying a home can be a challenge. As any U.S. home buyer knows, prices and interest rates have both been on the rise. And there’s been strong competition among buyers in many parts of the country.

Being a foreign national can add more challenges to this list, like having a thin credit file and being unfamiliar with the mortgage lending process in the U.S.

As you prepare to get a U.S. mortgage, learn as much as possible about lending rules, loan types, and the mortgage application process before shopping for homes. You may also benefit from finding a real estate agent and lender who are experienced in assisting people in your situation. Having an expert on your side can make a big difference to your experience and success.

Buy U.S. property as a foreign national

You do not need to be a U.S. citizen to buy a home in the States. If you’re a permanent resident, temporary resident, refugee, asylee, or DACA recipient, you can apply for a mortgage to finance your own home.

You’ll just have to show a green card, work visa, or another document that proves you’re legally allowed to live and work in the U.S. Your credit history, income, and debt will also affect your eligibility and the size of the loan you could get.

To find out whether you can buy a home in the U.S., get a mortgage preapproval from a lender. You can get started right here.


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