Home Loans for Non-US Citizens in Miami & Florida

One of our specialties is getting a mortgage for non us residents in Miami and Florida and all across the United States, helping them invest in residential real estate.

Owning a home in the United States is a dream of many, a milestone that marks the start of one’s American Dream. Be it for a primary residence, second home, or investment, the opportunities that await are just endless. 

Unsurprisingly, U.S.’s beautiful landscape, advanced economy, technology, and social benefits attract thousands, if not millions, of foreigners every year. Some stay temporarily for work, business, or vacation, while others opt to settle there for good. 

But regardless of their purpose, having a residential property in the U.S. is a goal for thousands of non-U.S. citizens.

There are home loans for foreign nationals of all types—not just foreign nationals, but also green card holders, and temporary residents.

 

So, can a non-US citizen get a mortgage loan?

One of the most common questions we’re asked by borrowers and their realtors is, “Can a non US citizen get a mortgage loan?”  The answer is Yes!  

Unfortunately, many non-U.S. citizens do not know their residential mortgage options. They think that home loans only cater to U.S. citizens, and they can only acquire their house through cash payment. As a result, many are discouraged and anxious to pursue their dream home. Others pay fully in cash, while some shy away from refinancing in times of need. 

But things do not have to be that way. 

Your citizenship should not be a hurdle in achieving your goal of being a homeowner in the U.S. Though you may face limitations and restrictions for traditional loans, there are still plenty of unconventional mortgage lenders for all types of borrowers, including foreign nationals and other non-U.S. citizens. 

These loan programs are not available in most U.S. banks, so you have to look elsewhere and consider the alternatives. Creative loan programs come with flexible requirements and terms, ensuring that most non-U.S. citizen clients are given a chance to own their homes in the U.S.

This comprehensive guide will introduce you to us mortgages for non residents, the loan terms and requirements, and how you may qualify for one.   

Types of non-U.S. citizens

First things first, who are considered non-U.S. citizens?

In the U.S., “noncitizens” include individuals who were not born in the U.S. and its territories, whose parents were not U.S. citizens or nationals, or have not undergone naturalization. It is an encompassing term that can be further broken down into three subcategories: foreign nationals, permanent residents, and temporary residents.

Foreign nationals

Foreign nationals or non-resident aliens (NRA) hold citizenships in any other country and have their primary residences outside U.S. borders. They do not enjoy the benefits offered to U.S. citizens, including most of the conventional mortgage loans. To qualify, they require niche and out-of-the-box home loan solutions offered by alternative lenders, such as a non permanent resident alien mortgage.

Permanent residents

Permanent residents or green card holders are individuals authorized to live and work in the U.S. Green card holders share most rights and responsibilities with U.S. citizens, like getting a license, availing social benefits, and owning real estate properties. They qualify for loans that are given to U.S. citizens with the best terms and interest rates.

Temporary residents

Temporary residents or nonimmigrants are foreign nationals granted visas to stay temporarily in the U.S. for specific purposes. These pre-defined purposes, also called classes of admission, require different types of visas, which dictate the resident’s duration of stay and lawful activities. Temporary residents may qualify for U.S. residential loans, but they may face more requirements and limitations depending on what visa they hold. 

Home loans for non-U.S. citizens in Florida are complex

If you're a foreign national, permanent resident alien, or temporary resident, let us navigate you through the process.

Statistics for foreign real estate transactions

As a non-U.S. citizen, diving into the U.S. real estate market to obtain a non US citizen mortgage loan may seem particularly daunting. Your approval is uncertain, and you do not even know if you are eligible in the first place. 

Many non-U.S. citizens feel the same, stopping them from having that property that they so long wanted to have. Good thing, a growing number of foreign buyers seem to have overcome these fears and have been taking their first steps into being U.S. homeowners. 

More than a decade after the 2008 Great Recession, the U.S. real estate market has been more open and receptive to foreign homebuyers

According to the National Association of Realtors’ 2021 report, 107,000 existing homes were bought by non-U.S. citizens from April 2020 to March 2021, with international residential transactions amounting to $54.4 billion. 

Statistics show that hundreds of thousands of foreign-born buyers flock to the U.S. every year to have their share in the U.S. real estate market, which is not surprising at all. 

Statistics on the residential real estate transactions of non-U.S. citizens

Non-US resident mortgage loans in Florida: what’s the attraction?

Thanks to its landscape, beautiful coastlines, economic outlook, and tax-friendly laws, Florida remains the top destination of foreign real estate buyers

The statistics shed hope on the increasing popularity of home mortgage loans among non-U.S. citizens: 

  • In 2020, Florida accounted for 21% of all foreign residential purchases, with $15.6 billion of total sales. 
  • Foreign purchases paid through mortgage loans climbed from 13% in 2011 to 29% in 2020. 

These reassuring trends call for creative loan solutions that will cater to borrowers originating from other countries, which alternative lenders are quick to address. 

The mortgage market adapts to the needs of its borrowers. 

With growing risk appetites, lenders have developed a wide variety of programs designed for non-U.S. citizens. They offer lower interest rates, lower down payments, and more favorable terms, despite the COVID-19 pandemic. 

Thanks to these programs, obtaining a home mortgage for non-U.S. citizens has never been as easy since the 2008 Great Recession. 

Home loans for foreign nationals in Florida: what are your options?

There are plenty of reasons why a foreign national would want a residential property in the U.S. They may want it to be their second home, a vacation property, or rent it out to generate additional income.

Unfortunately, being a foreign-national buyer comes with some limitations:

  • First, they are ineligible for conventional mortgages offered by most U.S. banks. 
  • They also lack the basic requirements like having a social security number and a U.S. credit score.
  • And, their sources of income are harder to verify than those who reside in the U.S. 

Given these limitations, foreign nationals need untraditional loans specifically designed to address their biggest limitations. 

Creative loan programs offer exactly that. 

They come with alternative documentary requirements which foreign nationals can easily meet, regardless of their primary residence. Documentation and loan terms for home loans for non us citizens are flexible, with uncapped loan amounts to purchase or refinance real estate properties. 

 

While the loan programs may vary from lender to lender, here is everything you need to know about the residential loan options for foreign nationals:

Amounts & limits: home loans for non us citizens

The loan amounts and limits for non us resident mortgage loans depend on the value of the property and the ability of the borrower to repay the loan. Technically, the sky is the limit as long as you can prove your creditworthiness to the lenders. Regular loans usually fall within $300,000 to $4M, but for properties worth more than that, super jumbo loans take over. With a super jumbo loan, a foreign national may borrow as much as $25M or even more, depending on the borrower’s case. 

To learn more, check out our complete guide on jumbo and super jumbo loans in Florida

Loan terms on home loans for foreign nationals

Foreign nationals can enjoy flexible loan terms depending on their needs and financial situation. There are short-term loans for those who can and prefer to settle their mortgage as soon as their financial situation permits. There are also long-term loans that work for borrowers who require lower monthly mortgage payments. The loan period may last for 40 years or can be as quick as 12 months too. Borrowers may choose among the following terms and interest rates:

Fixed rates

Foreign nationals may opt to take home loans with a fixed interest rate throughout the repayment period. This option offers certainty to borrowers, preventing an unexpected rise in the borrower’s monthly mortgage payment. Under fixed rate, foreign nationals may choose between 15-, 30-, or 40-year fixed loans. The longer the term, the higher the interest rates are. 

Adjustable-rate mortgages (ARM)

ARM is a type of mortgage where a fixed rate applies in the first phase of the loan and adjusts periodically thereafter until the repayment period is completed. Borrowers may benefit from an ARM if the prevailing interest rate in the market drops during the second phase of the loan. However, it also comes with uncertainties because the monthly mortgage payment can also go up depending on the market conditions. 

Foreign nationals may choose between 3/1, 5/1, 7/1, or 10/1 ARMs. The first and second numbers pertain to the first and second phases of the loan, respectively. For example, for a 3/1 ARM, a foreign national would pay a fixed interest rate for the first three years of the loan. Afterward, the rate resets after every year, depending on the current market rates. 

Interest-only payments

A foreign national may also opt for an interest-only mortgage. In this type of loan, the borrower’s monthly mortgage payments only include the loan’s interest. All the remainder are paid at the maturity date, also called a balloon payment. This setup works best for foreign nationals who expect to receive a considerable sum of money before maturity. However, it also carries uncertainties because of the large amount needed in case any problem happens. 

Short-term bridge loans

Short-term bridge loans typically last from 12 to 24 months, depending on the borrower’s preference. This type of loan typically comes with interest-only payments because of its short repayment period. It has higher interest rates but typically allows prepayment without penalties, giving borrowers the chance to refinance the loan with better terms if needed. It offers quick closing too.

To get the best deal for your situation, you should weigh these options based on your cash flow. 

Types of mortgages for non us residents

Creative home loans aim to address all financing worries related to buying or keeping a residential property in the U.S. As a foreign national, you may apply for a purchase loan or refinance your residential property if you already have one. 

Following are the three general types of foreign national loans for non residents:

  • Purchase
  • Cash-out refinance
  • Rate-and-term refinance

Purchase

A purchase loan is used to finance a residential property that the borrower does not own yet. It is the simplest type of loan where the loan proceeds go to the property seller in exchange for the title being transferred to the borrower. The loan amount starts at $300,000 and can go as high as what your income and creditworthiness can support. 

Cash-out refinance

Aside from purchase loans, foreign nationals may also apply for refinancing

Refinancing is a lesser-known type of home loan that can save many borrowers from high interest rates, unmanageable monthly payments, and provide liquidity in times of urgent need for cash.

A foreign national who has an existing mortgage may apply for cash-out refinancing. 

  • This type of financing allows borrowers to trade their old mortgage with a new one and cash out the difference between the two loans. 
  • It liquidates the equity tied in the property and may offer better rates and terms than the old mortgage. 
  • Borrowers can get as much as $5M with unlimited cash in hand. In this trying time, this cash may save an international business from possible bankruptcy or pay for urgent and costly medical bills. 

Cash-out refinances can also be used for delayed financing

  • Delayed financing is a method where the buyer pays for the residential property in cash and then puts debt on the property afterward by applying for a cash-out refinance.  
  • Typically, lenders will require a “seasoning” period, where the borrower must own the property for a certain amount of time first (e.g., six months).  
  • Depending on the length of time that has passed since the original purchase, the lender may use the original purchase price as the value of the property.

Rate-and-term refinance

In rate-and-term refinancing, borrowers trade an existing mortgage for a new one with better terms. For example, they may refinance a short-term bridge loan to a 30-year fixed mortgage before the balloon payment comes. This way, they will not need to pay a lump sum at once but have the payment amortized over 30 years instead.

Rate-and-term refinancing also offers an advantage during the pandemic. Foreign nationals who have an existing adjustable- or variable-rate mortgage may refinance their loans to a fixed rate. This way, they will be saved from any rise in the prevailing interest rates as the U.S. real estate market recovers from COVID. 

LTV on US mortgages for non residents

The loan-to-value ratio (LTV) shows how much risk a lender is willing to accept for your mortgage loan. Depending on the transaction type, LTV is calculated in two ways and may carry different implications too. 

LTV for purchase

For purchase loans, the borrower’s down payment depends on the LTV approved by the lender. By dividing the offered loan amount by the lower of the appraised value or the contract price, borrowers can calculate their LTVs, and know how much cash they need to prepare as a down payment. 

For example, if the residential property is worth $1M and the lender offered an 80% LTV, the loan will cover $800,000 of the total price while the borrower pays for the remaining 20%, equivalent to $200,000. A lower down payment typically comes with a higher interest rate, so balancing and considering your options, needs, and financial situation is important.  

Alternative lenders typically offer a maximum LTV of 75% to 80% for purchase loans. Because the given limits are the maximum LTVs, you may need to prepare more cash depending on your circumstances and creditworthiness.

LTV for refinance

LTVs also apply to rate-and-term and cash-out refinancing. For these types of loans, LTV refers to how much of the home’s equity is loaned by the lender. It is computed by dividing the loan amount by the property’s appraised value. 

For example, if a house worth $1M received a refinance loan offer of $700,000, that means the borrower qualified for a 70% LTV. The $700,000 will be given as cash-out, while the remaining 30% part of the equity remains owned by the borrower. 

Foreign nationals may enjoy LTVs of at most 65% to 70%. The lower the LTVs, the better rates and terms the borrower will receive. 

Types of properties for mortgage loans for non U.S. citizens

When it comes to mortgage loans for non U.S. citizens, you are not limited to single-family homes. There are residential loan programs available to foreign nationals to purchase or refinance all imaginable property types. Here is a comprehensive list: 

  • Single-family residences; 
  • Townhomes;
  • Condominiums, including non-warrantable condos; 
  • Planned urban development properties (PUDs)
  • Condotels and other short-term rentals; 
  • Co-ops;
  • 2- to 4- unit properties; and 
  • Vacant land.

There are so many options for mortgage loans for foreign nationals

With our years of experience helping foreign nationals, let us be your go-to expert.

For what purposes can you use your residential property?

The occupancy type of foreign nationals must align with their residency status. Because their primary residence is outside the U.S., they can only use the above-mentioned properties as an investment or a second (vacation) home. 

Second or vacation home

Most lenders require the property to be located in a vacation or resort area for this occupancy type. If your property of interest is located in a metropolitan area, there is a high likelihood that the lender would consider it as an investment property instead of a vacation home. 

Investment property

Also known as non-owner-occupied property, a foreign-national borrower cannot stay permanently or temporarily in the purchased or refinanced property. Instead, it must be rented out to third parties to generate income as a form of investment. Note that investment properties typically come with slightly higher interest rates and lower LTVs.

Investor non resident alien mortgage loans in Miami & Florida

The U.S. real estate market attracts foreign real estate investors from around the globe, and lenders have designed investor non resident alien mortgage loans. 

Debt service coverage ratio (DSCR) program

The DSCR program is perfect for foreign national investors who have high DTI and cannot or opt not to submit proof of income or employment verification. Under this program, creative lenders do not compute the borrower’s DTI and instead focus on the property’s income potential. By dividing this income potential by the property’s expenses, the debt service coverage ratio can be computed, hence its name. 

Depending on the obtained DSCR, the loan amount may go as high as $7.5M, with an LTV of at most 80%. If you are a real estate investor who plans to purchase or refinance multiple rental properties, the rental portfolio program may suit you better. 

Fix-and-flip bridge loan

Foreign nationals have access to fix-and-flip bridge loans to finance their purchase or rehabilitation of 1- to 4-unit properties. They can use this loan to buy a fixer-upper, renovate the property, and sell it at a higher cost to generate income. The typical loan period is 1 to 2 years, so borrowers should see that the project is completed on time to avoid financial problems. First-time investors are eligible for this type of loan because lenders do not require foreign nationals to have prior fix-and-flip experience. 

Rental portfolio program

This loan program is designed for seasoned real estate investors who want to purchase or refinance multiple residential properties under one blanket loan. Some lenders allow foreign nationals to participate in their rental portfolio program, with flexible requirements and loan amounts from $1M to as high as $50M. 

What documents are needed for foreign national loans for non residents?

Foreign nationals can enjoy flexible requirements depending on the loan program and their circumstances. Generally, there are three paths a borrower can take: full, alternative, or no documentation.   

Full documentation

This path is perfect for what we call horse borrowers, or those with good credit history, low debt-to-income ratio (DTI), and in compliance with all the requirements needed. Under this route, borrowers report their documented income and allow the lenders to compute their DTI. To qualify for full documentation, the borrowers must provide:

  1. Foreign tax returns;
  2. W-2 equivalents;
  3. Paystubs;
  4. Bank statements; and
  5. Foreign credit reports.

Full documentation carries less risk for the lenders; thus, foreign nationals who take this path typically enjoy the best rates and terms.

Alternative documentation

Not all borrowers can be horses. 

We also have zebra borrowers who, for one reason or another, cannot comply with all the requirements needed for the full documentation. 

Zebra borrowers can be self-employed individuals who do not have paystubs and a steady flow of income in their tax returns. They can be unemployed or retired individuals but with a high net worth or considerable amount of assets. 

No matter what reason makes a foreign national a zebra, alternative documentation can help them overcome the challenges. 

Under alternative documentation, foreign borrowers are not required to submit their foreign tax returns. Instead, lenders ask for alternative documents to verify the borrower’s ability to repay the loan. 

The alternative documents needed for each loan program may vary depending on a case-by-case basis. 

Below are some sample scenarios under the alternative documentation route:

A self-employed foreign national applies for a mortgage loan to purchase a vacation home in Orlando, Florida
  • Due to the lack of a consistent monthly income stream, the borrower cannot submit income tax returns, pay stubs, or W2 equivalents. 
  • Given the borrower’s dilemma, the lender asks for an accountant or CPA letter showing two years of income instead. 
  • The borrower can easily comply with this requirement and can then proceed to the next steps leading to the closing of the vacation home. 
A foreign national is in a hurry to purchase a rental property in Tampa, Florida
  • Because of the urgency and the borrower’s preference of not disclosing their income, the lender offers the debt service coverage ratio (DSCR) program
  • In place of the borrower’s monthly income, the lender gauges the property’s income potential relative to its expenses. 
  • This program does not need proof of income nor employment verification. 
  • No DTI is computed, which works best for borrowers with high DTI. 
  • Applying under the DSCR program allows the borrower to expect a quick timeline, guaranteeing that the closing due date will not be missed.
A high-net-worth foreign national wants to refinance a property in Miami, Florida
  • Due to the lack of monthly income, the borrower surely cannot submit income tax returns. 
  • Given the borrower’s assets, the lender recommends the asset depletion program
  • Under this program, the monthly income stream is computed based on the amount of assets declared. 
  • Note that “asset depletion” is just an underwriting tool and will not require the borrower to liquidate the assets literally. 
  • The borrower accepts the lender’s recommendation and is now confident that the refinancing is on its way.

No documentation – hard money loan

Other foreign borrowers prefer not to disclose any information regarding their income. They also cannot take the alternative documentation route because they do not want to report their assets or submit an accountant letter, for example. 

To respect this preference, lenders designed other home loan programs that require no income documentation at all

Instead, the lender focuses on the value of the property to be purchased or refinanced, hence why these loans are referred to as collateral-based or hard money loans

This is the easiest and quickest route; however, this ease comes with a tradeoff. To make up for the higher risks, lenders impose higher interest rates. 

Watch the video below to see how we helped a foreign national from Spain close in only 4 days with a hard money loan.

Other services for foreign nationals: applying for a mortgage as a non us citizen

Remote closings

Safety always comes first when applying for a mortgage as a non us citizen. To avoid the risk of acquiring COVID, foreign nationals now enjoy the benefits of digital, remote closings. All the loan processes are completed remotely, eliminating the need to travel to the U.S. in most circumstances.  

Corporate services

Mortgage brokers also help in setting up a limited liability company (LLC) or other U.S. business entities. These entities, an LLC, for example, can act as the borrowing entity and hold the property title on behalf of the foreign national. This option is perfect for buyers who want to keep their privacy, have limited liability, and enjoy tax advantages. 

US bank accounts

Finally, mortgage brokers can also assist with opening a U.S. bank account. Lenders require foreign-national borrowers to have a U.S. bank account where their monthly mortgage payments will come from. This process can also be done entirely online, so you won’t need to think about the travel restrictions and safety concerns.

Country of origin limitations for a non resident mortgage in the USA

Unfortunately, some lenders do not offer a non resident mortgage in the USA to foreign nationals residing or earning income from countries perceived as economically and politically risky. 

FATF and OFAC country lists

Most lenders will not lend to citizens from countries included in the FATF High-Risk and Non-Cooperative Jurisdictions List and those subject to the OFAC active sanctioned program

As of October 2021, these countries include:

  • Afghanistan
  • Burma
  • Cuba
  • The Democratic Republic of the Congo
  • Egypt
  • Iran
  • Iraq
  • Liberia
  • North Korea
  • Russia
  • Somalia
  • Sudan
  • Syria
  • Ukraine
  • Venezuela
  • Yemen
  • Zimbabwe

Be sure to visit the FATF and OFAC websites for the most updated list. 

Middle East and Former Soviet Bloc

Borrowers living in or earning income from the Middle East and Former Soviet Bloc countries (except the current members of the European Union) are eligible for creative home loans subject to additional restrictions and requirements. 

For example, they are required to have an active U.S. bank account for at least six months before their loan application.

Finding lenders willing to extend credit for foreign nationals from these countries may be difficult, but it is not impossible. 

If you find yourself caught on these restrictions, contact DAK Mortgage for assistance. 

We helped Venezuelan foreign nationals get a $2.1M refinance

Despite Venezuela being on the OFAC list, we found our client a lender with flexible guidelines.

Temporary and permanent resident home loan: what are your options?

Permanent residents

Compared to foreign nationals and temporary residents, permanent residents have the highest odds of obtaining a U.S. home mortgage loan. 

They enjoy the same residential loans offered to U.S. citizens, with the same requirements and terms. They are qualified to apply for conventional loans backed by Fannie Mae or Freddie Mac, which come with better rates and terms.  

Learn how we helped a green card holder from Argentina obtain a permanent resident home loan for a $2.63 million new construction condo.

Temporary residents

Temporary residents are also eligible for the same loan programs as green card holders. 

To get the best terms and rates, they may apply for conventional loans but are subject to slightly more restrictions. For example, temporary residents may need to provide a valid Employment Authorization Document (EAD) and/or an unexpired visa to process their loans. For visas set to expire within three months, proof of continuance may also be required. 

For permanent and temporary residents who have issues like high DTI, low credit score, and no proof of income or employment will have a hard time qualifying for conventional loans. In cases like this, creative home loans prove to be more beneficial. 

Use DAK Mortgage to get a mortgage for non US residents 

Your citizenship and residency status should not get in the way of you owning your dream home in the U.S. Regardless of what limitations you are facing, there are plenty of alternative mortgage specialists willing to embrace your situation and lend money for your purchase or refinancing, be it for a primary residence, vacation home, or real estate investment. 

As a non-U.S. citizen, you can enjoy flexible terms and requirements. You can enjoy custom-tailored home loans based on your specific case and needs. With creative residential loans, nothing should stop you from being a U.S. homeowner. Now, are you ready to take the leap?

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