I’m Not a U.S. Citizen. Can I Get a Mortgage?

Whether your from Asgard or Albania, getting a mortgage in the U.S. as a non-citizen can be tricky.

6:27 pm ET

May 13, 2015 May 13, 2015

Jay Maidment ©Marvel 2015

Immigrants are having a significant impact on the U.S. housing market. According to the Research Institute for Housing America, immigrants accounted for nearly 40% of the net increase in U.S. homeowners from 2000–2010. Meanwhile, the same group estimates that U.S. homeownership rates among Hispanic immigrants will hit 50% by the year 2020.

Overall, their numbers are still relatively small, representing only 11.2% of owner-occupied homes in 2014, according to the Joint Center for Housing Studies. Even so, that’s up from 6.8% 20 years earlier.

So immigrants are clearly buying homes. But what sort of obstacles and challenges do they face that native-born home buyers do not?

To be sure, there are no legal barriers to foreign nationals buying property, owning homes or obtaining loans in the U.S. Foreign investors buy U.S. property and do business with U.S. banks all the time—getting a mortgage and buying a home is simply more of the same, on a smaller scale.

“Residency of any kind is not a requirement for home ownership in the U.S.,” said Jason Madiedo, president of Alterra Home Loans, in Las Vegas, Nev. “The challenge for the consumer is to gain financing.”

Documenting foreign financial info can be a challenge

For a legal immigrant with an established employment and credit history in this country, the process of buying a home is much the same as it is for a citizen. However, there are still certain challenges that non-citizens may face when seeking to buy a home in the U.S. that native-born borrowers are unlikely to encounter.

“It becomes a little more difficult for a foreign national to buy an owner-occupied property unless they’re here with a job in the U.S.,” said Bill Ashmore, president of IMPAC Mortgage in Irvine, Calif. “The longer somebody’s here

and the more they can document their income through tax returns, the better off they are.”

Even if they’ve established themselves professionally and financially in their home countries, recent arrivals may find it challenging to get a mortgage in the U.S. Ashmore said.

One of the major reasons is because the information needed to document income  and credit is coming from abroad. That means the information may need to be translated into English, or may be in a different format or based on different conventions than American bankers are used to—for example, there will be no W-2s for earnings abroad.

There’s also the matter of verifying the validity of information provided by unfamiliar individuals or institutions.

“Are you going to accept the profit and loss statement of the accountant?” he asked.

As a result, many foreign nationals tend to simply pay cash for home purchases, which Ashmore termed the “path of least resistance.”

That’s not to say that foreign financial information can’t ever be used in obtaining a mortgage from a lender in this country. Ashmore said his company is presently developing a program in cooperation with about 25 foreign banks to enable borrowers to document assets abroad. However, potential borrowers would need to have accounts with a participating bank to benefit.

Alternative measures of credit, income sometimes needed

Non-citizen homebuyers tend to fall into two groups, according to Madiedo, who is past president of the National Association of Hispanic Real Estate Professionals. The first group, he said, are affluent foreign nationals with the financial resources to buy property in the U.S. and the ability to come and go as they wish.

The second, he said, are the ones who come here seeking work and opportunity, people he calls “the type that this country was built on.”

“These folks have a much harder time obtaining financing,” he said.

Source: www.realtor.com

Category: Credit

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