Our client, a foreign national from the United Kingdom, was in a tough spot. He was under contract to purchase a 10-acre colonial home in Cooperstown, New York as an investment property. His previous mortgage broker, however, was not able to get him approved for a loan.
There were multiple challenges with his loan request.
First, he was self-employed and was not able to show sufficient income to prove his ability to repay the loan. This made his debt-to-income ratio (DTI) too high to qualify under traditional underwriting guidelines.
Second, he owned no real estate at the time. Many lenders require ownership of at least one property in order to qualify for an investment property loan.
Third, the subject property was unique – an 1850s colonial home and barn sitting on 10 acres that used to be an inn for nearly 100 years. Due to the potential for lack of comparable sales in the area, this created an additional risk that traditional lenders shy away from.
We helped our client with a loan program that solved all his issues. Our lender had more relaxed guidelines:
- Our client did not have to provide any documentation of his personal income and his DTI was not even calculated. Instead, the lender focused solely on the cash flow of the property by calculating the property’s debt service coverage ratio (DSCR loan).
- We worked with the lender to obtain an exception to the rule that the borrower must own a property.
- Finally, after reviewing the appraisal and the comparable sales in the area, our lender approved the property, despite its unique characteristics and large acreage.
Ultimately, we provided our client with a loan at 70% loan-to-value with an interest rate in the 5’s, and he successfully closed on the purchase of this picturesque home, much to the happiness of our client and the realtors involved.
In our client’s own words, we “turned what seemed like the impossible into something possible and had everything sorted very quickly.”
To learn more about our loan programs for foreign nationals, please visit home loans for foreign nationals and other non-U.S. citizens.
