How to Get a Mortgage as an Immigrant to the United States
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For more than a century, America has greeted people from around the world with the credo, “Give me your tired, your poor, your huddled masses yearning to breathe free.” This phrase emblazoned on New York City’s Statue of Liberty provides a beacon of hope for immigrants coming to the United States to start new lives.
As immigrants get jobs, start businesses and become a part of the American lifestyle, many will begin to contemplate buying a home. In some cases, it may be harder to qualify for a mortgage in the U.S. than it is for citizens, but there are a number of different mortgages available for immigrants to purchase homes. We’ll cover those in this guide.
First things first: What is your immigration status?
Before you consider getting pre-approved for a mortgage as an immigrant to the United States, it’s important to know your immigration status. There are a variety of home loan programs available, but the qualifying requirements and documentation will depend on what type of residency you currently have.
Lawful permanent resident
A lawful permanent resident is someone who is legally recognized and lawfully recorded as having permanent residency in the U.S. as an immigrant, according to U.S. Citizenship and Immigration Services. Lawful permanent residents are issued a Form I-551, or Permanent Resident Card — more commonly called a “Green Card” — to verify this status, allowing them to live and work permanently in the United States.
The requirements for getting a mortgage as a permanent resident alien under all standard loan programs are roughly the same as they are for a U.S citizen. That means that an immigrant with valid proof of work and residency in the United States can obtain conventional, FHA, VA and USDA financing, at the same rates and terms as a U.S. citizen.
The only difference is the immigrant will need to provide a current, unexpired green card to the loan officer. If for any reason the green card is subject to renewal, a Permanent Resident Case Status check can be done using the individual’s USCIS receipt number. The USCIS receipt number tracks the progress of a particular immigration filing, and can be used by a lender as proof of a pending green card approval or renewal.
Non-permanent residents eligible for mortgages
Non-permanent residents are immigrants who are permitted to live in the United States on a temporary basis, with the ability to be granted employment authorization by the USCIS. Different visa statuses are granted to non-permanent residents depending on the type or work they are doing, the purpose of the work, whether they are a member of a foreign government and how long they have been working and will continue to work in the United States.
The chart listed below outlines non-permanent resident statuses that are acceptable for mortgage lending, the types of visas they would be provided, and who the visas apply to.
|Visa Holders Who Are Eligible for Mortgages|
|Non-permanent Resident Visa Type||Who it applies to|
|E Series (E-1, E-2 & E-3)||Nationals of countries with a commerce treaty with the United States who are here on business to carry out “substantial trade.”|
|G Series (G-1, G-2, G-3, G-4, G-5)||Employees of foreign governments or international organizations living in the United States.|
|H Series (H-1B, H-1C, H-2, H-3, H-4)||Temporary workers with specialized knowledge and at least a bachelor’s degree in a specialty field.|
|L Series (L-1A, L-1B, L-2)||Professional employees who work for a non-U.S. company and are being transferred to an American subsidiary.|
|NATO Series (NATO I-6)||Representatives, officials, and experts from NATO countries visiting on official business.|
|O series (O-1A, 0-1b, 0-2, 0-3)||Individuals with extraordinary ability in the sciences, arts, education, business or athletics.|
|Canadian and Mexican NAFTA series||NAFTA specific employees for prearranged official business activities.|
Loan requirements for non-permanent residents
There are some specific requirements that non-permanent resident aliens must meet in order to be eligible for financing under conventional, VA, FHA and USDA lending guidelines. First we’ll cover a few basics that all non-permanent visa holders must meet.
Social Security number
A valid, verifiable Social Security number is required for consideration under standard conforming loan programs. ITINs (individual tax identification numbers) are not acceptable under standard lending guidelines; however, there are ITIN lending programs that we will cover later in this article.
Any immigrant who is lawfully present in the country can request a Social Security card. Some immigrants will apply for a Social Security number at the same time they apply for an immigrant visa, while others request one after they’ve already obtained their visas.
Information about the process of applying for a social security number as a non-citizen is available on the Social Security website.
The visa cannot be less than six months from expiration, unless an employer letter of sponsorship for visa renewal can be provided. If a borrower’s employment changes after the loan application, a valid employment authorization document (EAD) must be provided, and the work authorization must be valid for at least one year after the proposed closing date. This document basically proves that you are eligible to work in the United States.
Income paid in U.S. dollars
The standard requirement for a U.S. citizen or permanent resident to qualify for a mortgage is to show a two-year history of income and proof of current full-time income. This is the same for non-permanent resident aliens.
If foreign income is received from an overseas corporation in a different currency, it must be converted to U.S. dollars for qualification purposes. If the returns are in a foreign language they will need to be translated to English to be used for the loan approval.
Proof of down payment funds and assets
Money to be used for a down payment should be in a U.S. account, and should reflect a consistent balance for the last two months. Any large deposits will need to be documented and explained.
If any of the money came from an overseas account, statements from those accounts will need to be provided. Any money in a different currency will need to be converted to U.S. dollars. If the source of the money cannot be documented, the lender may not allow them to be used for the transaction.
New immigrants may not have any credit scores due to a lack of established credit history in the United States. However, Fannie Mae, Freddie Mac, FHA, USDA and VA loans all offer non-traditional credit report options for borrowers with no credit scores at all.
Below is a brief overview of what lenders will accept in lieu of a traditional credit history or credit score.
Rent payment history for the last 12 months
Lenders are mostly interested in the last 12 months of payment history, especially your housing payments. If you have paid rent for the last 12 months to an apartment complex or property management company, you can get them to fill out a form called a verification of rent, or provide 12 months worth of canceled checks or bank statements verifying on-time payments.
Renting from a family member or friend is not considered an acceptable rental source.
In addition to the rental income history, lenders want to see how you are handling your regular housing expenses, so a 12-month utility bill history showing payments on electric, water, sewer or any other rental related bill is acceptable.
Other non-traditional credit history items
Besides your housing related expenses, lenders will usually require at least two or three of the following items to prove you are able to manage non-housing related expenses. These may include cell phone bills, cable bills, car insurance or life insurance.
Most lenders will want to see that you haven’t had any late payments in the last 12 months.
No diplomatic immunity
This is not very common, but if the visa indicates that a non-permanent worker has diplomatic immunity, they won’t be eligible for standard mortgage financing. Diplomatic immunity keeps a United States court from forcing payment or seeking judgment in the event of a loan default, so lenders won’t lend to anyone with this designation on their visa.
Minimum requirements for loans to non-permanent residents
If you can meet the requirements of the basic conditions listed above, then you’ll be eligible for the following lending programs.
The Federal Housing Administration provides insurance on the mortgages offered by FHA approved lenders, and the terms are very flexible for first time homebuyers. Non-permanent resident alien borrowers can purchase a home with a 3.5% down payment with credit scores as low as 580.
You can only purchase a primary residence. The FHA will accept non-traditional credit histories to qualify. As long as you have a valid visa and two years of verifiable employment and income in the United States, you can be approved for an FHA loan.
Fannie Mae and Freddie Mac are government-sponsored enterprises that purchase residential mortgages. They create the guidelines for conventional loan programs that allow for as little as 3% down if you are a non-permanent resident alien with a good credit score.
With a minimum of a 620 credit score, the requirements are higher than in the FHA loan program.
Each year, approximately 8,000 non-citizens join the U.S. military. Non-permanent resident aliens are not allowed to join the military, but valid green card-holding permanent resident aliens can join and serve, receiving the same benefits as U.S. citizens in the military.
One of the benefits the Veteran’s Administration gives to eligible active duty and veteran service members is the VA home loan benefit. It allows for a 0% down payment, no minimum credit score requirements and higher debt-to-income ratio flexibility than either the FHA or conventional loan products.
The U.S. Department of Agriculture offers a mortgage program to provide low- to moderate-income families with 0% down payment financing options to purchase homes in rural areas. They are more stringent with credit score requirements, requiring at least a 640 FICO, although non-traditional credit histories are permitted.
Non-permanent resident aliens can be approved for a USDA home loan under the same requirements as FHA loans. A valid visa, employment history, Social Security number and verifiable income are all requirements, as well as documentation of the source of any funds used for closing costs.
Mortgage loans for undocumented immigrants
An individual tax identification number loan allows undocumented immigrants an opportunity to get home loan financing without a Social Security number. The amount of down payment varies by lender — here are some of the features you can expect.
Higher down payment requirements
Some ITIN lenders may allow for down payments as low as 10%, however they may only lend in a handful of states. The more common down payment requirement will be 15% to 20%.
Although no credit report is required, expect to provide the non-traditional credit sources outlined above.
Primary residences only
If you don’t plan to live in the property you are purchasing as your primary residence, then you won’t qualify for an ITIN loan. They are designed for owner-occupant borrowers only.
Mortgage loans for foreign nationals
Non-permanent resident aliens who don’t meet the requirements outlined above may still have options for mortgage lending. Here are some of the features of these types of loan, most commonly called “foreign national loans.”
Higher down payment requirements
You can expect a minimum down payment of at least 25%, and even higher if you are buying a second home or investment property; however, there may be programs offering as little as 10% down payments. There may be more flexibility with where the money comes from, but the lender will still need any foreign asset values to be converted to U.S. dollars. Documents must be translated to English, if applicable, and in most cases the lender will want to see 60 days worth of deposit history.
No Social Security number, ITIN or U.S. credit required
Foreign national loan programs do not require any documentation of a Social Security number, ITIN, or U.S. credit report. A foreign credit report may be pulled, or a non-traditional credit history may be required.
More total reserves needed
Loan programs for foreign nationals require at least 12 months of reserves, and some may even require proof that up to 24 months worth of payments are in a liquid account before closing. “Liquid” means that the money must be in a checking, savings or money market account that doesn’t require a liquidation or withdrawal process like a retirement account.
Varying terms of the mortgage
Lenders may offer interest-only, adjustable rates, balloon payments and loan amounts up to $10 million in some cases. Interest-only loans allow you to pay only the interest accruing, keeping the payment very low.
Balloon payment rates are usually lower during the period leading up to the “balloon,” at which time the entire loan balance comes due.
There may be penalties for paying off a foreign national loan early. This could amount to as much as 6 months worth of interest on your loan, so be sure to check with your loan officer to confirm any prepayment penalties.
Any borrower from a country that has sanctions against it imposed by the Office of Foreign Assets Control or that is on the Specially Designated Nationals list will not be able to obtain financing for a mortgage in the United States. This list may change periodically, and a loan can be declined at any time if a borrower is determined to be from a country that has been added to the list while the loan is being processed.
Most of the traditional lending programs offered to U.S. citizens are also available to permanent and non-permanent resident aliens meeting residency and employment guidelines outlined in this guide. As with any loan, lenders are prohibited by the Fair Housing Act and the Equal Credit Opportunity Act from discriminating based on race, religion, national origin, sex, marital status, and age.
Any immigrant who is lawfully here with a documented right to work, or who meets the guidelines for ITIN or foreign national loans, may be able to obtain a mortgage loan to purchase a property in the United States.