Foreign National Mortgage Loans & Non-US Citizen Mortgages  (2024)

• Foreign nationals can get a mortgage in the USA regardless of their US credit history, citizenship, or residency status.
• HomeAbroad offers foreign national mortgage loan programs for non-US Citizens, suited to your specific needs as a USA newcomer on a visa or foreign real estate investor. We can consider your credit history from your home country or alternative methods of establishing creditworthiness, to qualify for a foreign national mortgage program.

While many foreigners looking to buy property in the USA, as a newcomer or foreign investor might believe that getting a mortgage without a US credit history is challenging, the reality of buying patterns suggests otherwise. Although 42% of foreign buyers opt for all-cash purchases, a notable 58% utilize financing options, indicating that mortgages are indeed accessible and a feasible alternative. (Source: National Association of Realtors)

Newcomers to the USA and foreign real estate investors don’t have to limit themselves to cash purchases or have an established US credit history to finance a property in the USA. HomeAbroad offers mortgage programs tailored for foreign nationals that facilitate financing without a US credit history or FICO score.

Additionally, foreign national expatriates with an established credit history in the USA can leverage the wealth-building potential of homeownership, an advantageous alternative to renting. HomeAbroad helps expats compare mortgage programs that are tailored to green card holders and work visas such as H1B, L1 visa, etc., and find the best mortgage program that suits their specific situation.

With over a decade of experience in the USA mortgage industry, I have helped many foreign nationals qualify for these specialized mortgage programs. In addition, as an expat who has personally gone through the process of purchasing a house in the USA, I deeply understand the nuances and challenges you might face.

In this guide, I will blend my professional expertise with my personal experiences to simplify the process of obtaining a US mortgage as a foreign national, regardless of US credit history. My goal is to provide you with clear, actionable steps to ensure a smoother journey to finance your property in the United States.

Can Foreigners Get a Mortgage in the USA?

Yes, foreign nationals can get a mortgage in the USA, even without a US credit history. It’s a common misconception that you need to be a US citizen or a green card holder to buy or finance US real estate. Foreign nationals, including expats with established US credit, newcomers, and foreign real estate investors with no US credit history, can access foreign national mortgage programs to obtain a mortgage in the USA.

At HomeAbroad, we provide mortgage programs for expats, newcomers, and foreign real estate investors to finance a primary residence, second home, or investment property.

What is a Foreign National Mortgage Loan?

Foreign national mortgages are specialized loan programs designed for foreign real estate buyers who do not have a US credit history. These programs cater to newcomers, and non-resident foreign real estate investors, enabling them to finance property purchases in the country with a no or thin credit history in the USA.

Foreign nationals who have established credit history are generally eligible for conventional mortgage loans in the USA. However, in the context of expats with an established credit history, foreign national loans refer to the lender’s expertise in working with foreign-born US residents who hold green cards or work visas such as H1-B, L1, J1, etc.

Let’s explore the specific loan programs that foreigners can opt for:

Foreign National Mortgage Loan Programs & Requirements

Following are the different types of foreign national mortgage loan programs. At HomeAbroad, we offer various foreign national mortgage loan programs to our clients based on their specific situation.

1. Full Documentation Loan using International Credit History

A Full Documentation foreign national mortgage option is for expats, newcomers, and foreign real estate investors who may have minimal or no US credit history. This type of loan requires thorough documentation to evaluate the borrower’s creditworthiness, income stability, and asset base, making it a suitable choice for those who can provide a detailed financial background. It’s versatile and can be used for purchasing a primary residence or an investment property.

Documents Required / Eligibility for full documentation foreign national mortgage:

For Expats/US Newcomers:

• Social Security Number (SSN)
• Passport
• Visa
• Proof of Income
• Employment Verification
• Residency documents (to include address, own/rent, start and end dates)
• College Enrolment Verification (for international students)
• International Credit Report

For Non-resident Foreign Investors:

• Passport
• Valid US Visa (if required by the lender; not necessary for investors from visa waiver countries, or if the lender’s guidelines do not mandate it)
• Income/Asset Documentation (
• Cash Reserves
• International Credit report

2. DSCR Loan for Foreign Real Estate Investors

The Debt Service Coverage Ratio (DSCR) loan focuses on the income potential of your investment property rather than your personal income. To qualify, the property’s income should sufficiently cover both the mortgage payments and operational expenses.

Since qualification hinges on the property’s income, this loan is ideal for foreign investors who may not have a US credit history. You don’t even need to provide a credit report from your home country or personal income or asset documentation. The DSCR loan is particularly appealing to those who prefer to leverage their investment property’s revenue as the primary criterion for qualification, bypassing the need for personal financial documentation.

Documents Required / Eligibility for DSCR or Investor cash flow foreign national mortgage:

• Passport
• Valid US Visa (if required by the lender; not necessary for individuals from visa waiver countries, or if the lender’s guidelines do not mandate it)
• Property Income Documents (Rent receipts or 1007 rent schedule)
• 6-12 Months Cash Reserves (may be required)

Please note that this is a general guideline, and the exact documentation requirements can vary significantly depending on your situation and the specific foreign national loan program you are applying for. It’s crucial to discuss with your mortgage lender to understand the specific document requirements for your unique situation.

Understanding International Credit Report

An International Credit Report (ICR) is a crucial tool that US lenders use to assess the creditworthiness of foreign nationals who have little to no US credit history. These reports are compiled by third-party agencies that gather credit information from your home country or any other country where you have a financial history. An international credit report typically includes the following:

• Your credit history in your home country
• Property ownership details, both within and outside the USA
• Information on property taxes and insurance
• Public records, including liens, judgments, and foreclosures
• Verification of your employment history for the past two years
• Verification of your residency history for the past two years

In most cases, your loan officer will initiate the process of getting an ICR after you provide the necessary information. This report plays a key role in helping lenders understand your financial background in a global context, thereby facilitating the mortgage approval process for foreign nationals.

What’s the Process of Getting a Foreign National Mortgage in the USA?

The following outlines a step-by-step process for obtaining a US mortgage as a foreigner with no US credit history. This is a general process, and some steps may vary based on your loan program and lender.

Step 1: Decide How Much House You Can Afford

The first step in securing a home loan in the USA as a foreign national is to determine what you can realistically afford as your maximum monthly mortgage payments. This is crucial as it influences your regular financial commitment more than the home’s purchase price.

You can use a foreign national mortgage calculator to get a clearer idea of your monthly mortgage payments and estimate your payments based on various loan terms and interest rates.

Mortgage lenders typically use two main ratios to calculate your maximum monthly payment for full-doc loans: the front-end and back-end ratios. The front-end ratio covers all housing costs, including property taxes and homeowner’s association dues, while the back-end ratio focuses more on your overall debt-to-income ratio without specific housing-related expenses.

For a DSCR loan, the focus shifts to the income potential of the property. Your loan officer will assess whether the property’s rental income is sufficient to cover the mortgage payments and operational expenses. The affordability of a DSCR loan is not based on your personal income but on the property’s ability to generate enough revenue to sustain itself.

When considering your affordability, take into account the following components of a monthly mortgage payment:

• Mortgage Principal and Interest: The base amount you’ll pay each month towards your loan.
• Property Taxes: Included in monthly payments and held in an escrow account for real estate tax payments.
• Homeowners Insurance Premiums: Necessary insurance for your property.
• Homeowner’s Association Dues/Assessments: If applicable for your property.

Step 2 – Get a Preapproval for a Foreign National Mortgage

Securing a preapproval from a lender is a crucial step in the home-buying process. A pre-approval gives you a clear idea of how much a lender is willing to loan you, which in turn instills confidence in real estate agents and sellers about your buying capabilities.

It demonstrates your seriousness as a buyer and can make negotiations smoother, as sellers are more likely to engage with buyers who have confirmed financial backing.

To start, you’ll need to find a lender that offers the type of loan you’re interested in, be it a full doc loan or a DSCR loan. It’s important to note that not all lenders work with foreign nationals, and those that do may not always offer the most favorable terms.

At HomeAbroad, we offer mortgage programs for foreign nationals from various lenders, ensuring the best financing terms for your property in the USA.

The pre-approval process typically involves an assessment of your financial situation and creditworthiness. Upon pre-approval, the lender issues a preapproval letter, which you can present to real estate agents and sellers to demonstrate your readiness and commitment in purchasing a property.

Step 3 – Understand the Loan Requirements, Eligibility, and Prepare Documents

To ensure a smooth mortgage application process, it’s crucial to be aware of the specific requirements of the loan type you are considering. Building on the documentation details provided earlier, let’s focus on the qualification criteria for each type of foreign national mortgage loan.

Full Doc Loans for foreigners:

• Down Payment: 20%-30% of the property’s purchase price.
• International credit report may be required.
• Debt-to-Income Ratio: Your DTI should typically be less than 41%, though this requirement can vary depending on your situation

DSCR Loans for foreigners:

• Debt Service Coverage Ratio: The property’s DSCR ratio should be 1 or higher, demonstrating its capacity to cover mortgage payments and operational costs.
• Down Payment: Similar to full doc loans, a down payment of 20% to 30% is required.
• Cash Reserves: You may be required to show cash reserves of about 6-12 months of the monthly mortgage payments.

Understanding these criteria for your chosen loan type is essential for a well-prepared and successful mortgage application.

Step 4 – Search for Your Home and Make an Offer

Now that you’ve secured pre-approval for a foreign national mortgage, the exciting part begins — house hunting in the USA. However, navigating the US real estate market can be challenging due to the unfamiliarity with the local real estate market. This is where a real estate agent with a CIPS (Certified International Property Specialist) designation can help you with their expertise in foreign real estate transactions in the USA.

Your real estate agent with CIPS will hand-hold you through the US home-buying process and help you find a property that meets your needs and preferences.

HomeAbroad has a network of CIPS agents, and you can easily find an agent with international expertise in your desired area with us.

Once you partner with a CIPS agent, the search for your ideal property begins. Your agent will curate a list of properties that match your specifications and budget, helping you in making a well-informed selection.

If you are a non-resident foreign investor, a CIPS agent can help you look for a property remotely through photos, video, and virtual tours of the properties.

When you find a property that captures your interest, the next step is to make an offer. Your agent plays a crucial role here, helping structure the offer with necessary contingencies to protect your interests throughout the transaction.

You and your agent will then draft a purchase agreement. This document will detail your offer to buy the property and include any items within the house that are part of the sale. At this juncture, you’ll also make an earnest money deposit. This deposit is a token of your commitment to the purchase, typically 1%-3% of the home’s purchase price, and it is held in escrow until the deal is completed.

For a more in-depth understanding of the US home buying process, be sure to check out our definitive guide on Foreigners Buying a House in the USA.

Step 5 – Process Your Foreign National Mortgage Application

With a formalized purchase agreement in hand, you’re now ready to delve into the mortgage application process. This stage involves completing and submitting all necessary paperwork to your your loan officer.

Although you might have already submitted some documentation during the preapproval phase, the application process requires a comprehensive collection of your financial information. This includes any outstanding details about your debts, assets, credit, and income that weren’t covered earlier.

Within three business days of submitting your application, your loan officer is required to provide you with a loan estimate.

This crucial document outlines the estimated terms of your mortgage loan and an itemization of closing costs. It’s an essential tool for understanding the details of your loan and for comparing offers, should you wish to explore other possibilities.

It’s important to review the loan estimate carefully to ensure that you are comfortable with the terms and costs involved.

Step 6 – Lock the Interest Rate

In the United States, mortgage rates are subject to daily fluctuations influenced by the bond market. To safeguard against potential rate increases during your loan process, it’s advisable to lock in your mortgage rate.

A rate lock ensures that your interest rate won’t change between the agreement and the closing of the loan, provided there are no changes to your application and the loan closes within the specified time frame.

Typically, you might consider locking in your rate once you have accepted the Loan Estimate and decided to proceed with a particular lender. Rate locks usually last from 30 to 90 days, though the duration can vary.

Your loan officer will guide you through the rate lock process, including choosing the appropriate timing based on current market conditions and your expected closing date.

It’s important to discuss the implications of a rate lock with your loan officer, including any costs associated with it and the best timing to maximize your financial benefit. A well-timed rate lock can provide peace of mind and financial predictability in your home-buying journey.

Step 7 – Mortgage Loan Processing and Underwriting

After you have accepted and signed your loan estimate, the loan processing stage commences. In this phase, you will be working with a loan processor, who plays a pivotal role in preparing and organizing your mortgage loan information and application for the underwriter.

The loan processor’s responsibilities include gathering and verifying all the necessary documentation and ensuring that your loan file is comprehensive and ready for underwriting. A meticulously processed loan application can significantly expedite the approval process.

The underwriter is the key decision-maker in the mortgage process. They are responsible for assessing whether you qualify for the mortgage loan based on the underwriting guidelines. During the underwriting process, the underwriter thoroughly verifies the provided information against qualification criteria.

Their goal is to determine the risk involved in lending to you and make an informed decision on whether to approve or deny the loan. It’s not uncommon for an underwriter to request additional documentation if needed to clarify or verify certain aspects of your application.

The underwriting process can be rigorous and may take some time, as it involves a detailed assessment of your financial situation. It’s crucial to respond promptly to any requests for additional information or documentation to keep the process moving smoothly and avoid delays in loan approval.

Step 8 – Conduct Property Appraisal

An essential part of the underwriting process is the property appraisal, which your loan officer will arrange. A professional real estate appraiser is tasked with evaluating the property you intend to purchase to ascertain its fair market value. The appraisal is done through various methods, most notably by comparing the property with similar homes recently sold in the area. This step is crucial as it assures both you and the lender that the price agreed upon for the property reflects its true market value.

Should the appraisal value come in lower than your agreed sales price, you generally have three options:

1. Cover the Difference: You can choose to pay the difference between the appraisal value and the sales price out of pocket.

2. Renegotiate the Sale Price: Engage with the seller to renegotiate the price based on the new appraisal value.

3. Walk Away: If your purchase agreement included an appraisal contingency, you have the option to withdraw from the deal without losing your earnest money.

Step 9 – Prepare for Closing

Congratulations, you’re almost at the finish line! With the underwriting process complete, it’s time to prepare for the closing day. This is the moment when you’ll finalize the purchase and take ownership of your new home in the USA.

Before the big day, your loan officer or processor will provide you with a Closing Disclosure at least three business days before you sign the mortgage loan documents. This document is crucial as it details the actual costs associated with your mortgage loan closing.

On closing day, remember to bring your photo ID, a copy of your Closing Disclosure, any other necessary paperwork, and the required funds. If all goes smoothly, you’ll sign all the documents, receive your keys, and officially become a homeowner in the USA!

Can Non-Resident Foreign Investors Close on a US Mortgage from Overseas?

Yes, non-resident foreign buyers who cannot be present in the United States for the closing process have several options to complete the process remotely:

• Embassy or Consulate Services: Many countries’ embassies and consulates offer notary services that are recognized in the United States. Buyers can sign documents in the presence of a consular officer.
• Apostille Certification: If your country is part of the Hague Apostille Convention, documents such as a power of attorney can be apostille-certified. This makes them valid for international use, including in the USA.
• Power of Attorney (POA): You can assign a power of attorney to someone in the USA, like a real estate agent or lawyer, to sign documents on your behalf. It’s crucial to draft the POA in compliance with the laws of the state where the property is being purchased. The POA must be properly notarized and, if needed, apostilled.

These methods require precise legal preparation and adherence to specific requirements. It’s highly recommended to work closely with your real estate agent, mortgage lender, and legal counsel to ensure all steps are correctly coordinated and compliant with both USA and international laws.

Mortgage Contingency Clause

It’s important to be prepared for every possibility. If, for any reason, your mortgage application is denied and your purchase agreement includes a mortgage contingency clause, you can withdraw from the deal without losing your earnest money. This clause is designed to protect you by allowing you to back out of the purchase if you cannot secure financing, ensuring your earnest money deposit is returned.

Congratulations on your journey to purchasing a house in the USA as a foreign national.

Now that you understand the mortgage process, are you ready to take the first step? Start your process to obtain a foreign national mortgage loan with HomeAbroad.

Success Story:

Hear from Thomas how we helped him buy and finance a home near his grandkids.

Frequently Asked Questions