Owning a home is still very much a part of the American dream. However, did you know that non-U.S. citizens can also enjoy this? While there are challenges to homeownership if you are not a citizen, know that lenders are open to extending credit to non-citizen homebuyers.
Let's look at how you can qualify for a home loan even when you are a foreigner residing in the U.S.
Permanent residents with green cards have a better chance of getting a loan since they represent less risk for lenders due to their immigration status, which indicates they are in the country for the long haul.
Nonpermanent residents may encounter more challenges getting approved since their ability to work in the U.S. is tied to their visa. However, demonstrating continuous employment and proper employment authorization documentation makes things easier for nonpermanent residents.
You'll want to note that Fannie Mae and Freddie Mac have nearly identical guidelines regarding mortgages for both green card holders and work visa holders. The most significant factor in these situations is proof of legal residency. If you're a foreign national who resides outside the U.S., the road is more challenging and requires a more substantial down payment for approval. The minimum down payment for foreign nationals is usually 30% of the property's total purchase price.
Regarding mortgage rates for non-U.S. citizens, as long as you prove permanent residency in the U.S., you'll get the same loan terms as any other applicant. The requirements for an FHA mortgage are a valid Employment Authorization Document and a Social Security Number. Also, the home you're purchasing must be your permanent residence.
Foreign residents must show proof of income, the same as every other mortgage applicant. Lenders usually require two to three years of steady income or employment. Tax returns can prove your earnings, so you need to prepare them for submission along with the application.
A challenge many foreigners face when applying for a mortgage is a lack of sufficient credit history. Lenders will look for a minimum of two years of credit history, with scores from all three U.S. credit bureaus, namely Equifax, TransUnion, and Experian.
Be aware that not all lenders offer loans to non-U.S. citizens. However, many do –and at competitive rates. For the most part, as long as you can verify your residency status, financial record, and work history, you can get approved for a conventional or FHA home loan. Have more questions? Contact us and get help with all the documentation you need for approval.
Jeff Lazerson - Mortgage Columnist since 2011