Calling all those who might be considered a Foreign National, Non Permanent Resident, Resident Alien, or those who may not even have a Green Card yet. Homeownership may not be as hard as you think. I never understood why the US government continues to call people who are not US citizens aliens. It sounds so impersonal. Illegal alien? Sounds like something to describe a character in Star Wars. So what does this have to do with mortgages? A lot. If you are not from this world, you can still buy a home right here in the good ‘ole US of A by getting a mortgage. It is important that you know what type of alien you are and how you are viewed by mortgage lenders. Non-US citizens are treated differently because the lender may not have any recourse if the borrower were to default on the mortgage - if you aren’t a US citizen and skip town it would be very difficult for a lender to get to you. There are several classes of immigrants, each with their own quirks when it comes to getting home financing.


Permanent Resident: Defined as a non-US citizen who has made the US their permanent home and is recognized as such by being issued a “Green card” by the US government. A green card is essentially a permanent visa. Most mortgage lenders will usually treat permanent residents as US citizens which means there aren’t any restrictions on the type of financing available to you as long as you meet all other qualifying guidelines.




Non-Permanent Resident: As we say in the business, “non-perms” work and reside legally in the US. Residency and authority to work is established by a variety of visa classifications. Here are some brief descriptions of the main visa classifications*:

Series (A-1, A-2, A-3): these visas are given to officials of foreign governments, immediate family members and support staff.

E-1, Treaty Trader: this visa is essentially the same as an H-1 or L-1; the title refers to the foreign country’s status with the United States.

G series (G-1, G-2, G-3, G-4, G-5): these visas are given to employees of international organizations that are located in the United States. Some examples include the United Nations, Red Cross, World Bank, UNICEF and the International Monetary Fund.

H-1, Temporary Worker: this is the most common visa given to foreign citizens who are temporarily working in the United States.

L-1, Intra-Company Transferee: an L-1 visa is given to professional employees whose company’s main office is in a foreign country.

TN, NAFTA visa: used by Canadian or Mexican citizens for professional or business purposes.
Many lenders over the past few years have loosened up underwriting guidelines for non-permanent residents and generally treat them as US citizens. Income, credit, and assets must meet program guidelines. However, there are some lenders who might restrict loan-to-value ratios (require larger down payments). The biggest challenge non-perms face is having established US credit histories. I have worked with a number of clients who had great six figure jobs and assets, but didn’t have much by way of credit histories since they had not been in the country long. This makes it very difficult for them to get optimal financing, even when lenders allow us to use alternative credit documentation. Usually what happens in these cases is that the non-perm has to take what they can get until their credit histories are more established and then refinance into a better loan product when the credit history is established. The bottomline is that is important to get a credit history as soon as possible.

Foreign National: This is a person who does not have a legal right to reside in the US. For example, a European (or any other non-US resident) who buys a second home here in the US for vacation purposes. Mortgage lenders will make loans to Foreign Nationals with substantial down payments; typically 20% or more is required. Lenders are not as concerned about credit because most Foreign Nationals do not have US credit histories. More weight is placed on documentable income and assets. Other restrictions foreign nationals come up against are with refinances. Most lenders will only allow rate and term refinances. I have yet to see a lender allow a “cash out” refinance for a foreign national.

Illegal Alien: The borrower is not working or residing legally in the US. Surprisingly, it is still possible to get a mortgage. Several mortgage lenders will use Individual Tax Identification Number (ITIN) as documentation for mortgage loans.

So there you have it. Even if you aren’t a US citizen you can still live the American dream.

Dollar denominated Foreign National loans are widely used by real estate investors in the UK, UAE, Australia, New Zealand, Canada, France, Germany, Brazil, Mexico, India, China, South Korea & Japan to acquire investment property in the United States at exceptionally low real costs with little to no currency, country, or political risk. The United States is one of the world's most historically stable real estate markets, which when combined with currently favorable exchange rates and the near universal convertibility of the US dollar make the USA the #1 country in the world for foreign direct investment in residential real estate assets. Our foreign national investor programs typically allow for deferral of interest for several years, allowing investors to effectively pull liquid returns out of their properties without the need to refinance or sell for several years, thereby eliminating the "cash-out" restrictions commonly faced by international investors in the USA.

 

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