How Home Buyers Who Aren’t Citizens Can Get a Mortgage
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Home buyers don’t have to be citizens or residents to get a mortgage in the U.S. In fact, the credit and financial requirements are essentially the same for any buyer. But there is a difference: Home buyers who don't live in the U.S. or who aren't citizens can find it challenging to produce the required documentation for a mortgage.
Because most U.S. lenders work with standard forms and reports, they aren't set up to easily help a borrower who can't produce a FICO score or a U.S. tax return. A mortgage application also includes dozens of questions and requests for transaction histories and bank statements.
But the bottom line is that if you file taxes in your country, have a history of paying bills on time and have a salary history, you should be in good shape to apply for a U.S. mortgage. For non-citizens without those credentials, other solutions often exist.
Here are three essentials you’ll need as a non-citizen mortgage seeker:
A real estate agent who has helped other clients like you buy homes
A lender who has experience working with clients in your situation
Patience. To buy a home with a mortgage in the U.S., you may be required to provide more documentation than you would elsewhere, and fulfilling those demands could take more time.
If you’ve got those — especially the patience part — you're ready to go. Below, you'll find details that can help non-citizens apply for a home mortgage. This article will help:
Non-citizens working and living in the U.S. with a valid work visa
U.S. residents with a permanent resident (“green”) card
Citizens of foreign countries who have a valid visa to the U.S.
What do lenders want?
Mortgage lenders need to establish that borrowers are financially qualified in three areas: credit, income and assets. They'll also check that the property being purchased — the collateral for the loan — has enough value, says Brian Franke, a vice president at HSBC, where he is mortgage sales manager for Manhattan and Long Island.
Penelope Huang, an agent with Golden Gate Sotheby's International Realty in Menlo Park, California, says her clients get approved for mortgages frequently. Her office, in Silicon Valley, caters to international buyers, many of whom live in or have roots in China, India, Brazil or Russia.
Although cash buyers get the headlines, over a third (36%) of non-citizen buyers got a mortgage from a U.S. lender, according to the National Association of Realtors’ 2017 Profile of International Activity in U.S. Residential Real Estate, which covers transactions from April 2016 to March 2017.
» MORE: Get the best mortgage
Documents required
U.S. mortgage lenders routinely ask borrowers for certain documents, such as tax returns and bank records, to verify their financial status and credit history. Non-citizens who work and live in the U.S. can use these, too, if they have a record of paying taxes, using credit and banking here. If not, they can use alternative documents.
Here’s how non-citizen borrowers can meet lender requirements:
Income
Non-citizens with a valid U.S. work visa or green card can often document their income in the same way citizens do, with payroll paperwork or signed federal tax returns. Guidelines for conventional mortgages don’t specify a minimum time non-citizens must have been in the U.S., only that they are able to live here legally, says Marisa Calderon, executive director of the National Association of Hispanic Real Estate Professionals. Individual lenders may have their own ways of verifying a borrower's finances. For example, HSBC verifies two years of income and the client’s current job.
At HSBC, borrowers may use a letter from their employer’s HR department showing earnings for the year to date and the previous two years. Or it accepts a letter from a certified public accountant verifying a borrower’s salary, commissions and bonuses for the required time span.
Credit score and history
If a U.S. credit score and credit history aren’t available, lenders may accept an international credit report. These reports don’t provide a credit score, but they do offer a history of payments made in a borrower’s home country.
“We don’t require a credit score, as it is likely that a foreign national won’t have established U.S. credit,” Franke says.
» MORE: Check your credit score
Property value
This part is the same for all buyers, citizens or not: To purchase real estate in the U.S., the lender will check property records and order an appraisal to verify the mortgage isn't more than the home’s value.
Copies of statements
All buyers seeking a mortgage must show copies of monthly bank statements, including savings, checking, retirement and investment accounts.
“Cash must be sourced and seasoned,” Franke says. This means that a lender will have to trace the origin of the funds you’re using in a real estate transaction and that the money must have been in your accounts for a certain amount of time.
The buyer’s motto: Be prepared
An experienced real estate agent can help clients prepare for the mortgage process. Huang and her team work with buyers for up to six months to help build a U.S. mortgage-friendly financial picture before they apply to a lender.
“What we try to do with our clients is get all of their money into the United States before we make an offer,” she says. Her goal: To show lenders three months of bank statements in the U.S. Then, “the lender will treat them pretty much like anybody else getting the mortgage,” Huang says.
Mortgage applicants can expect a rigorous, thorough review, which can seem excessive to non-citizen buyers.
“Americans will tend to go, 'OK, fine, we’ll give you whatever you want,' whereas other people will go, 'Why do you want that?'" Huang says.
Finding a lender with experience working with non-citizens is the key to success. Veteran lenders understand how to help borrowers fulfill the requirements. If you’re planning to buy a home in the U.S., ask real estate agents and other non-citizen home buyers for recommendations.
“It takes a little bit of preparation and legwork to be successful,” Huang says.
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