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- Non-U.S. citizens can buy property in the U.S. whether or not they have legal documentation permitting them to be here.
- Non-resident homebuyers will either need to get an ITIN mortgage or pay in cash to buy a home.
- ITIN mortgages are often much more expensive than traditional mortgage options.
You don’t necessarily need to be a U.S. resident or citizen to buy a home here. Even individuals without documentation permitting them to live and work in the U.S. are free to buy property and become homeowners.
In fact, according to the Migration Policy Institute, more than 3 million of these individuals living in the U.S. are homeowners. And the Institute on Taxation and Economic Policy reports that this group contributes $3.6 billion in property taxes each year.
Can a non-U.S. citizen get a mortgage loan?
Non-U.S. citizens are allowed to buy property in the U.S. regardless of whether or not they have legal documentation permitting them to be here. This means that foreign nationals, visa and green-card holders, and even those who have entered the country unlawfully can buy a home in the U.S.
Legal residency status
Nora Aguirre, a Realtor in Nevada and member of the National Association of Hispanic Real Estate Professionals board of directors, says that many of the homebuyers she’s worked with who lack legal status in the U.S. are families and first-time homebuyers who are working to establish permanent residency in the country. But getting to that point can take a long time.
“Unfortunately, this process is not a short one, so it may take 10, 15 years. So they’ve been here for that long,” Aguirre says. “And so of course, becoming a homeowner is a big thing for them.”
Eligibility requirements for non-U.S. citizens
Getting a loan as an immigrant can be challenging depending on your residency status and the type of documentation you have. While permanent and non-permanent residents who are legally authorized to live and work in the U.S. are generally able to use a conforming mortgage to buy a house, immigrants without this documentation usually have to find non-conforming alternatives or pay for the home in cash.
To get a conforming mortgage, which is what most people think of as a “traditional mortgage,” you’ll need to have:
- A Social Security number or an Individual Taxpayer Identification Number (ITIN)
- Documentation showing you’re authorized to live and work in the U.S., such as a work visa or green card
Both permanent and non-permanent residents can qualify for a conforming mortgage. But non-residents or those whose residency documentation has expired typically have to utilize a type of non-QM loan called an ITIN mortgage.
Credit history
As with any mortgage loan, lenders will also need to look at your credit history to make sure you will responsibly manage the loan you’re looking to borrow. Credit score minimums vary by loan program and lender, but you can expect to need a score at least in the high 500s to low 600s to qualify.
Income verification
Lenders will also look at your income and verify that you have consistent and stable earnings with which to make your monthly payments. They may also ask for bank statements to confirm the deposits, and they may contact the company you work for to verify your employment.
Down payment requirements
You’ll usually need a down payment to qualify for a mortgage loan, too. This is much like a deposit, and the more you put down, the better loan terms you’ll usually get. Some loan programs, like USDA and VA loans, for instance, require no down payment.
Types of mortgage loans for non-U.S. citizens
If you’re a non-U.S. citizen, you have the following mortgage options at your disposal:
Conventional loans
To get a conventional loan — also called a conforming loan — you’ll need to have a Social Security Number or Individual Taxpayer Identification Number and be authorized to work in the U.S. This means a work visa or green card.
Conventional loans also require at least 3% down and, usually, 620 credit scores.
FHA loans
An FHA loan is an option if you’re a non-permanent resident alien with authorization to work in the US. FHA loans require at least 3.5% down and a 580 credit score (500 if you can make a 10% down payment).
VA loans
To get a VA loan, you’ll need to be a U.S. military member, veteran, or married to one. These loans require no down payment and have no official credit score minimum, though most lenders require at least a 640. Rates on VA loans tend to be more affordable than on other loan programs.
ITIN loans
ITIN mortgages allow borrowers to use their ITINs to apply for a mortgage. ITINs are given by the Internal Revenue Service and allow those who are ineligible for a Social Security number to file their taxes.
ITIN loans for non-U.S. citizens offer a path to homeownership for individuals without the documentation required for a conforming mortgage. But the trade-off is that they tend to be pretty expensive for borrowers. Many ITIN lenders require a down payment of at least 20%, and ITIN mortgage rates are often significantly higher compared to rates on conforming mortgages.
“They’ll have to come in with more down payment, they’ll have to have more savings, and they’re usually going to be paying higher interest rates,” Aguirre says.
According to Aguirre, a person getting an ITIN mortgage could end up paying as much as $500 more on their monthly mortgage payment than someone getting a comparable conforming mortgage, thanks to the higher rates that come with an ITIN mortgage.
Steps for immigrants to apply for a mortgage loan
Buying a house as a non-U.S. citizen can be complex. Here are the steps you’ll want to follow when applying for a mortgage as a non-U.S. citizen:
Find a lender
If you’re buying a house in the U.S. as a non-resident, you’ll want to team up with pros who have experience working with non-citizen and ITIN borrowers. This means finding an experienced lender and loan officer — and maybe a real estate agent, too.
Preparing documentation
Having the right documentation — for your status, your income, your employment, and more — is all critical when you buy a home as a non-U.S. citizen. Your lender needs to know that you will be a responsible borrower who will have the resources to make on-time payments for the foreseeable future. Talk to your loan officer about what documents you should have ready and how to submit them securely.
Understanding loan terms
It’s important to understand what loan terms you’re getting, too. This means the interest rate, payment, closing costs, fees, and other features of your mortgage that will impact your home purchase and your finances moving forward. Be sure to ask questions if anything is confusing, and consult a real estate attorney if you feel you are being discriminated against as a borrower.
Challenges non-U.S. citizens may face
Though it’s possible to get a mortgage as a non-U.S. citizen, that doesn’t mean it will be easy. Prepare for these challenges for non-U.S. citizens getting a mortgage:
Higher interest rates
Lenders may see non-U.S. citizens as higher risks than those who have permanent residency here, as they could be more likely to abandon their homes and stop making payments. For this reason, they may charge higher interest rates than with other borrowers.
Larger down payments
Another way lenders may account for the added risk is with higher down payment requirements. This means the lender has to loan less money and, for borrowers, it may make them less likely to skip payments, since they have more financial skin in the game.
Limited loan options
Non-U.S. citizens have options for getting a mortgage, but they won’t qualify for any and every loan program out there. You’ll need to shop around and compare options if you’re buying a home as an immigrant.
Tips for non-U.S. citizens to improve mortgage approval chances
Buying a home as an immigrant can be challenging, but there are steps you can take to improve your chances. Here’s how to go about improving mortgage approval changes for non-US citizens:
Build a strong credit history
A good credit history can show lenders that you’re responsible with debt and that you’re at low risk of defaulting on your mortgage. It can also make it easier to qualify for a loan and could get you lower interest rates and better terms, too.
Save for a larger down payment
A bigger down payment means less risk for the lender. The more you offer up front, the easier it will be to qualify for the loan — and get better terms when you do.
Seek professional advice
Talk to experienced loan officers, mortgage brokers, real estate agents, and real estate attorneys along the way. They’ll guide you toward the right choices for your specific goals as a homebuyer.
Buying a home as a non-U.S. citizen FAQs
Yes, non-U.S. citizens can get a mortgage loan if they meet the lender’s eligibility requirements and they provide necessary documentation. There may also be legal residency requirements for non-US citizen mortgage loans.
Non-U.S. citizens can apply for conventional loans, FHA loans, VA loans (if eligible), and ITIN loans.
Eligibility for non-U.S. citizen mortgage loans is usually based on legal residency status, credit history, income verification, and down payment.
Often, non-U.S. citizens may be required to make a larger down payment compared to U.S. citizens.
Non-U.S. citizens looking to improve their chances of mortgage approval should focus on building a strong credit history, saving for a larger down payment, and seeking professional advice can improve approval chances.
