Mortgages for Foreign Nationals | US Mortgages for Non Residents
Non-qualified mortgages (Non-QM) take a more common sense approach to underwriting and are based on a case by case scenario to determine a borrower’s ability to repay. Each loan scenario is unique and every case scenario is different, which is weighed on its own merits. Mortgages for foreign nationals depend on the mortgage company. Two separate US mortgages for non residents for borrowers: full doc and asset qualification, which allow first time home buyers.
The Two Options for Foreign Nationals
The traditional full document underwritten loan is a foreign mortgage loan that takes debt-to-income into consideration, which use full documentation of income and assets.
The asset qualification US mortgages for non residents does not require employment or income – debt-to-income ratios is not calculated and use asset statements in order to qualify. The asset qualification program is meant for foreign national borrowers who cannot fully document income or assets. Borrowers often benefit when having significant verifiable assets with this alternative way of qualifying for a foreign national program.
Full Documentation for Foreign National Program
The foreign national program is for someone who lives in another country and visits the United States for business and vacation. A borrower needs to be a legal resident of another country.
- Designed for borrowers looking for loan amounts up to $2 million.
- Can have an interest only feature.
- Debt-to-income up to 50%.
- Income and assets are fully documented.
- Unless a credit report is available, a U.S. credit report is not required.
Asset Qualification – Mortgages for Foreign Nationals
Asset qualification mortgage for foreign nationals are for someone who lives in another country, visits the United States for business, or vacation. You are eligible for the foreign national program as long as you are a legal resident of another country.
- Qualify based on a verifiable liquid assets and loan amounts up to $2 million.
- First time home buyer allowed and no rental requirement.
- Require no income or employment.
- Debt-to-income ratios not calculated.
- A U.S. credit report is not required, unless it is available.
Down Payment for Full Documentation
- Funds must be sourced and seasoned for 2 months.
- Stocks, bonds, and mutual funds (retirement accounts) may be used for down payment:
- 100% of the value of asset is allowed when determining reserves.
- If assets are more than 20% of the funds for down payment and closing costs, no documentation of liquidation is required.
Down Payment for Asset Qualification
- Assets for the down payment for 1031 exchange are eligible with proper documentation.
- Must provide bank statements or quarterly statements when converting foreign currency to U.S. dollars.
- A copy of the Wall Street Journal’s conversion table is required on the same date as the bank statements or quarterly statements.
Eligible Assets for Mortgages for Foreign Nationals
- Checking, savings, and money market account – 100% cash value.
- Public stocks and bonds – 90% cash value.
- Mutual funds – 90% cash value.
- Retirement accounts – 80% cash value.
Product Information for Full Documentation and Asset Qualification
- 15 year and 30 year fixed mortgages.
- Fully amortized 5/1, 7/1, 10/1 adjustable rate mortgage (ARM).
- Interest only 5/1, 7/1, and 10/1 ARM.
- For qualified borrowers, ARMS are assumable after the fixed term.
- No negative amortization.
- No prepayment penalty.
Foreign Mortgage Loan Eligibility
- Non-U.S. citizen with valid passport and VISA.
- A borrower in a country that participates in the State Department’s VISA Waiver Program (WVP) is not required to provide a VISA.
- 2nd homes, non-owner occupied, and first time home buyer is allowed – no prior rental requirement.
- VISA status must be documented.
- Need a copy of passport.
- For Canadian and Mexican citizens, will allow:
- A laser VISA card.
- NAFTA treaty VISA.
- IRS form W-8 Ben (certificate with foreign status) must be filed with the IRS.
Seasoning on Bankruptcy and Foreclosure for Foreign National Loan Program
- Chapter 7 and 13 bankruptcy need to be discharge for 4 years unless compensating factor will allow 2 or more years.
- Short sale and deed-in-lieu: 4 years out unless compensating factors will allow 2 or more years.
- Foreclosure: 7 years out unless compensating factors will allow 3 or more years.
Other Types of Loan Programs for US Mortgages for Non-Residents
- ITIN mortgage loans without a social security number and non-resident alien mortgage loans.
- Fix and flip loan programs.
- New construction loan programs.
- Debt-service coverage loans that are based off of the cash flow of the property.