Getting a Mortgage for Non-U.S. Citizens

How to qualify for a U.S. home loan if you're not a citizen

For many foreign-born individuals living in the United States, owning a home is one of the cornerstones of the American dream. But there’s a perception among some non-U.S. citizens that there’s no way they can obtain a mortgage, thus creating a huge barrier to that goal. However, according to the National Association of Realtors (NAR), resident foreign buyers—those living in the United States either as recent immigrants or those holding visas for professional, educational, or other purposes—are actually more likely to purchase a home using a mortgage. In their "Profile of International Activity in U.S. Residential Real Estate" published in July 2019, the NAR reported that 67% of resident foreign buyers acquired mortgage financing from U.S. sources.

Certainly, buying a home can present challenges if you’re not a citizen. But as the NAR report shows, the reality is that many lenders are willing to extend credit to non-citizens—even to those without a credit history in the United States. Non-citizens can even qualify for government-insured mortgages, which have the advantage of requiring low down payments. Here we discuss what you need to know to qualify for a home loan in the U.S. if you're not a citizen.

Key Takeaways

  • Owning a home in the U.S. is certainly achievable for non-U.S. citizens, but it comes with a bit of extra work.
  • Obtaining a mortgage can be the trickiest part for a foreigner, and will depend to some extent on their residency status.
  • Generally, it's easier for foreigners to qualify for a U.S. home loan if they are permanent residents with a green card or non-permanent residents with a valid work visa. 
  • The Federal Housing Administration (FHA) offers home loans to non-U.S. citizens with the same loan terms as it does other buyers.
  • A good strategy is to establish relationships with banks that have a U.S. presence in order to build up an American credit report history.

Home Ownership and Residency Status

One point to keep in mind is that the requirements for getting a home loan depend in large part on one’s residency status. Most borrowers tend to fall within one of the following groups:

  • Permanent residents with a green card (Form I-551)
  • Non-permanent residents with a valid work visa (E1, E2, H1B, H2A, H2B, H3, L1 and G1-G4)
  • “Foreign nationals,” whose primary residence is not in the U.S.

Generally, it’s much easier to get a loan if you fall into one of the first two categories. That’s because mortgage giants Fannie Mae and Freddie Mac—which buy the majority of home loans on the secondary market—have pretty much the same guidelines for green card and work visa holders as anyone else. The main caveat is that the lender has to verify the legal residency of the applicant.

However, foreign nationals don’t conform to Fannie or Freddie standards, so lenders have to keep these loans on their own books. Because the bank assumes more risk this way, it’s more likely to require a substantial down payment. 

FHA Loans

Keep in mind that the Federal Housing Administration (FHA), which has relatively low credit score requirements and requires a down payment as low as 3.5%, is another option for non-U.S. citizens. It offers the same loan terms as it does to other buyers, provided the borrower shows proof of permanent residency in the U.S.

If you’re a non-permanent resident seeking an FHA mortgage, you have to use the home as a primary residence and supply a valid Social Security number and Employment Authorization Document. This means that the agency does not extend mortgages to non-residents just planning to use the home occasionally. A mortgage calculator can be a good resource to budget for the monthly cost of your payment.

Documentation Hurdles  

The main obstacle to getting any mortgage is proving to the lender that you fit its risk profile. That means providing your employment history, credit history, and proof of income. For U.S. citizens, this is a relatively straightforward process because most have a credit trail in the United States and a backlog of W-2 forms and tax returns that show their earnings over the years.

But things get a little trickier for someone who hasn’t been in the country all that long or doesn't live in the U.S. most of the time. For example, how do you prove your creditworthiness if you don’t have a credit report from the three major bureaus: Equifax, TransUnion, and Experian? 

You have a definite advantage if you have an existing relationship with an international bank with branches in the U.S. It will have a record of your finances already, so it may be more willing to take a bet on you, even without an American credit report. Fortunately, the mortgage industry is dominated by large, global banks, so there’s a good chance you’ve had accounts with one of them in the past.

Also, some lenders may be willing to order international credit reports as a substitute for the three major U.S. credit bureaus. However, this can be an expensive process and one that’s generally only available for residents of Canada, the United Kingdom, and Ireland. 

If you don’t have a long work history in the U.S., you have another reason to give FHA loans some thought. The FHA accepts non-U.S. tax returns as proof of employment.

Lenders to Consider

Some lenders will make borrowers go through more hoops than others to get a loan, so you can eliminate a lot of headaches by identifying ones that frequently work with non-U.S. citizens. If you’ve done business with an international bank that operates here, that’s probably the place to start.

Credit unions are another alternative. These nonprofit financial service providers tend to offer extremely competitive rates and, depending on their location, may have special lending programs for green card and visa holders. 

The Bottom Line

Many banks and mortgage companies offer conventional and FHA home loans to non-U.S. citizens, provided they can verify their residency status, work history, and financial track record. Lenders that work with this population extensively tend to be more flexible with the documentation you need.