Finding housing is a critical step towards settling into your new life in the U.S. While renting an apartment is always an option, many recent immigrants eventually aspire to settle down and buy a home.
However, a common question often arises: can non-U.S. citizens get a mortgage in the U.S.?
In this blog, we will explore the challenges, requirements, and available mortgage options for non-U.S. citizens looking to achieve homeownership in the United States.
Can Non-U.S. Citizens Get a U.S. Mortgage?
The good news: yes! Non-U.S. citizens can indeed get a mortgage in the U.S.
Non-U.S. citizens have the same rights to homeownership as U.S. citizens, and there are actually several loan programs available for the specific circumstances of foreign nationals.
With that in mind, there are several considerations and eligibility requirements for non-U.S. citizens, which will determine which mortgage options are available to them.
Let’s dive in.
Key requirements to get a U.S. Mortgage as a non-U.S. Citizen
Non-U.S. citizens looking to get a mortgage in the U.S. should understand the following requirements from most lenders before kicking off their search.
1. Residency status
Most mortgage lenders will often first ask about a foreign national’s residency status to assess their eligibility as a borrower. Since a mortgage is a long-term debt obligation, they want to ensure that every borrower will be able to live in the U.S. for the long term. Here are some of the most common residency statuses that are eligible for U.S. mortgage loans:
Permanent residents:
Permanent residents, also known as Green Card holders, have a relatively straightforward path to mortgage eligibility. Lenders generally treat them the same as U.S. citizens when assessing their mortgage applications, which means they may be eligible for a wide range of mortgage programs.
Non-immigrant work visas
Non-U.S. citizens who hold valid work visas, such as H1-B, L1, and other non-immigrant work visas, may also qualify for mortgages. Lenders typically require proof of employment and income stability, which can be demonstrated through employment verification letters, pay stubs, and other relevant documents.
Non-permanent residents may need to provide additional documentation like a valid visa, employment contract, and Employment Authorization Document (EAD) to support their mortgage application.
F-1 / J-1 students
F-1 or J-1 students may have the possibility to apply for a mortgage in the U.S., especially if their relatives or another U.S.-based co-signer has a stable income. Lenders will consider the cosigner’s income and credit history during the loan application, providing a stronger financial position for the student's mortgage application.
Foreign Investors & non-residents
Foreign investors and non-residents who aren't living in the U.S. but want to invest in the U.S. can use Debt-Service Coverage Ratio (DSCR) loans. With a DSCR loan, the property's income is the main factor for qualification, making it easier for investors to get financing without much personal income paperwork. This simplified process helps foreign investors achieve their investment goals in the U.S. real estate market, even if they are not residents.
2. Credit history
Mortgage lenders will also check credit history as a critical step to assessing a borrower’s risk.
Those who have been in the U.S. for some time and have built a U.S. credit history will typically have more mortgage options and better rates available.
Non-U.S. citizens who do not yet have a U.S. credit history should explore mortgage options specifically designed for individuals with no or thin U.S. credit. These loan programs rely on international credit reports from the borrower's home country to evaluate their creditworthiness and determine whether or not to approve the loan. This process varies by lender, but it is often done through a manual process of retrieving reports from international credit bureaus.
3. Income & employment requirements
The specific income requirement for non-U.S. citizens to qualify for a mortgage in the U.S. can vary depending on the lender, the type of visa, and the chosen mortgage program.
Lenders typically assess the borrower's ability to repay the mortgage based on their debt-to-income (DTI) ratio, which compares their monthly debt obligations (i.e. mortgage payment) to their monthly income. A lower DTI ratio is generally preferred to ensure the borrower can comfortably manage their debt.
For conventional mortgages and government-sponsored loans, which we will discuss below, non-U.S. citizens are typically required to have a stable employment history for at least 2 years. However, there are other mortgage options tailored for foreign nationals that may accept less employment history.
4. Cash reserves
Having sufficient cash reserves can be a significant advantage for non-U.S. citizens applying for a mortgage in the U.S. Cash reserves are funds held in readily accessible bank accounts and can serve as a safety net for borrowers. They assure lenders of the ability to meet mortgage payments and cover living expenses, especially in the absence of a substantial U.S. credit history.
5. Other requirements
SSN or ITIN: Lenders will require either a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for tax reporting and identity verification. While the SSN requirement is common, there are several lenders who will accept an ITIN in its place.
Learn how to apply for an SSN or ITIN here.
Additional Documentation: Some lenders might ask for additional financial records, such as proof of rental history or utility bills.
Co-borrowers or Guarantors: This is optional; you can get a mortgage without a cosigner or guarantor. However, a co-signer with established U.S. credit can strengthen your mortgage application.
U.S. Mortgage Options for Non-U.S. Citizens
Non-U.S. citizens have specific mortgage options available to them, depending on their residency status, credit history, and other factors.
Non-U.S. Citizens Mortgage Options with U.S. Credit History
Conventional mortgages:
Conventional mortgages are home loans not insured or guaranteed by the government. They are backed by private lenders and follow guidelines set by Fannie Mae and Freddie Mac, the main government-sponsored enterprises. Conventional mortgages typically have a lower risk tolerance, and therefore can offer competitive interest rates and terms for approved applicants.
Residency status: Permanent residents and non-permanent residents with valid work visas may qualify for conventional mortgages. The borrower needs to be in the U.S. to qualify for this loan. Thus, global investors cannot be eligible for this loan.
Financial requirements: Lenders typically require a U.S credit history (i.e. credit history above 620) and proof of stable income. The down payment requirements vary but can be as low as 3% for eligible borrowers.
It may be helpful to find an international bank with branches in the U.S. or to first establish a relationship with a U.S. bank through a checking account and credit card. If the bank has a record of your finances already, it may be more willing to take a bet on you before you have fully established a strong U.S. credit history.
Who offers Conventional Mortgages?
Private banks (e.g. Chase, Bank of America, PNC Bank)
Credit unions (e.g. Argent, PenFed, First Source Federal Credit Union): Find a credit union near you using the NCUA’s Credit Union Locator
Mortgage companies (e.g. LendingTree, Rocket Mortgage, Guild Mortgage Company)
Also read: 11 Best Conventional Mortgage Lenders in 2023
FHA loans:
A Federal Housing Administration (FHA) loan is a home mortgage that is insured by the government and issued by a bank or other lender that is approved by the FHA. These loans are designed to assist low-to-moderate-income homebuyers, including first-time buyers, by offering more flexible credit requirements and down payment options.
Residency status: Non-U.S. citizens must provide proof of permanent residency in the United States and meet other FHA guidelines. These loans are backed by the government, providing added security for lenders. Like conventional mortgages, the borrower must reside in the U.S. to qualify for this loan.
Financial requirements: FHA loans have more flexible credit requirements (with a minimum credit score as low as 500-580) and allow for a down payment as low as 3.5%. FHA loans typically have the lowest interest rates as well.
Who Offers FHA Loans? Any FHA-approved lender (e.g. Guaranteed Rate, PNC Bank, Quicken Loans) will offer these loans.
To find a lender in your city, search the full list of FHA loans.
Non-U.S. Citizens Mortgage Options with No U.S. Credit
Foreign national mortgages:
Certain lenders provide mortgage programs designed specifically for non-U.S. citizens who lack a credit history in the U.S., often called “foreign national mortgages.”
Residency status: Foreign national mortgages are often the most flexible in terms of residency status, given they are tailored for non-U.S. citizens.
Financial requirements: Lenders use international credit reports to evaluate the creditworthiness of potential borrowers, allowing them to offer loans to non-U.S. citizens without a U.S. credit history. Down payments, income requirements, and interest rates vary, but these loans may require a larger down payment and more documentation. Who offers foreign national mortgages? Private Banks and Lenders with specific programs for foreign nationals (e.g. HSBC Bank, Lendai, Cross Country Mortgage)
Debt-Service Coverage Ratio (DSCR) loans:
DSCR loans are specifically designed for investment properties and evaluate the income potential of the property rather than the borrower's credit history. As a result, the borrower's credit history is no longer a factor, and non-U.S. citizens can easily secure a mortgage without requiring U.S. credit.
Residency status: Residency status does not matter for these loan types, making it easy for global investors and immigrants to qualify for an investment mortgage.
Financial requirements: DSCR loasn typically require a DSCR ratio of 1 or higher and a down payment ranging from 20-25%. For foreigners, credit score may not be strictly necessary, as lenders may adjust other terms (i.e. down payment and interest rates) to compensate for the risk.
Who offers DSCR Loans? Private Lenders (e.g. Kiavi, Axos Bank, Cross Country Mortgage)
The takeaway:
By understanding the residency and documentation challenges, meeting the requirements, and exploring the available mortgage options, non-U.S. citizens can navigate the path to homeownership. With the right guidance and preparation, the dream of owning a home in the United States can become a reality for non-U.S. citizens, bringing them closer to their version of the American dream.
If you have just moved to the U.S., you may want to apply for your first credit card to begin building a U.S. credit history before you apply for a mortgage. Over time, this credit history—along with proof of stable income, employment, and legal residency status—will unlock more mortgage options at better rates.
Fortunately, Nova Credit lets you use your foreign credit history from select countries to apply for U.S. credit cards from the moment you arrive, so you can kickstart this credit-building process.
Currently, Nova Credit serves individuals coming from Australia, Brazil, Canada, Dominican Republic, India, Kenya, Mexico, Nigeria, the Philippines, South Korea, Spain, Switzerland, and the U.K.
Use your foreign credit history to start your U.S credit history
New to the U.S.? Check if you can use your country's credit history in the U.S. to apply for credit cards and start your U.S credit history using Nova Credit.
More from Nova Credit:
How to use your foreign credit history to get credit in the U.S.