USA Mortgage Options for Non-US Foreign Investors

FREE DOWNLOAD: 10 Costly Mistakes Foreigners Make Buying U.S. Real Estate

When I first started buying investment properties in the USA as a foreigner back in 2016, securing financing was a nightmare.

The underwriting process was just not set up for an overseas buyer, and the terms offered made most deals unviable. I had to rely on expensive private money loans.

Today, everything has changed…

The mortgage landscape for non-US investors has transformed dramatically. A number of specialized lenders have emerged with new mortgage loan products (and processes) tailored specifically for foreign property buyers and investors, making the underwriting and approval process quicker and simpler, and the loan products much better value.

Related: Real Estate Closing Costs in the USA for for Foreign Property Investors

Two US Mortgage Options for Foreign Investors

Today, if you want to buy property in the US as a foreigner, you have two main options:

 

1. Foreign National Loans

These are full-document loans from US banks, international banks, or non-bank lenders. The lender underwrites you as the borrower as well as the property.

Qualifying Criteria for Foreign National Loans

✅ US social security number or EIN
✅ US address
✅ US and/or local tax returns
✅ Proof of income
✅ Debt to income ratio
✅ Proof of funds for down payment and reserves
✅ Property value/condition

These loans are often hard to qualify for, and the burden of information required for underwriting is high.

Loan Terms for Foreign National Mortgages

Because these types of mortgages are full-documentation loans, the terms are usually quite reasonable.

🏦 Loan to Value: Up to 85%
🏦 Interest Rate: 0.875% to 1.00% higher than FHZ loans
🏦 Term: Up to 30 years
🏦 Rate Fix: 30-years fixed interest

Right now in May 2025, foreign national mortgage loan interest rates are sitting at around 7.5% to 7.85%.

2. DSCR Loans

Debt Service Coverage Ratio loans have been a game-changer for foreign investors. Instead of underwriting the borrower, lenders focus the majority of their underwriting on the property itself.

DSCR lenders look for sufficient net operating income to cover loan repayments, typically at a ratio of 1.25 or higher. This means if your mortgage payment is $1,000, they want to see net rental income (after expenses) of at least $1,250.

But the best part about DSCR loans? No social security number required. No credit checks. No tax returns. No proof of income. As long as your investment property generates solid cash flow, getting a loan approval is remarkably straightforward.

Qualifying Criteria for DSCR Loans

✅ US LLC with EIN Number
✅ US bank account
✅ Qualifying Property
✅ Proof of funds for down payment and reserves

Loan Terms for DSCR Mortgages for Foreign Buyers

Because these types of mortgages are full-documentation loans, the terms are usually quite reasonable.

🏦 Loan to Value: Up to 85%
🏦 Interest Rate: 0.875% to 1.00% higher than FHZ loans
🏦 Term: Up to 30 years
🏦 Rate Fix: 30-years fixed interest

Right now in May 2025, foreign national mortgage loan interest rates are sitting at around 7.5% to 7.85%.

I use DSCR loans for all of my US investment properties I intend to hold long-term. Once you find the right property, pre-approval is quick, and funding/closing is generally straightforward.

Related: Cleveland’s Population Shift is Driving Real Estate Investing Opportunities

Documentation and Preparation Steps for DSCR Loans

For DSCR loans, everything starts with the property. You’ll need to provide your lender comprehensive metrics including:

✅ Rental income (rent roll)
✅ Property tax amounts
✅ Insurance costs
✅ Property management fees
✅ Purchase price and down payment amount

With this information, some of the better lenders can provide a pre-approval within 2-4 business days.

After pre-approval, you’ll receive a term sheet outlining various options with different fees, terms, down payments, and interest rates.

You’ll also need to provide details about your purchasing entity (typically a US LLC), including corporate documents and EIN number. If you don’t have a US LLC, there are even lenders that will set one up for you.

You’ll also need proof of funds for your down payment to satisfy anti-money laundering requirements.

From there, the lender conducts standard underwriting, including title search and independent appraisal, before proceeding to funding and closing.

Related: Hidden Risks for Section 8 Property Investments

The US LLC Advantage

Using a US LLC provides critical benefits for foreign investors:

🔒 Personal liability protection
🏦 Simplified US bank account opening
✅ Easier mortgage qualification

From the lender’s perspective, dealing with a US entity simplifies potential foreclosure scenarios if necessary. They don’t want to be chasing down someone overseas address to serve legal and process notices, and they want US jurisdiction.

Make sure you set up your LLC correctly. Take into account jurisdiction, the type of LLC, how it is managed, and pay particular attention to the quality and content of your operating agreement.

Related: Landlord Friendly Real Estate Markets for Overseas Property Investors

Common Pitfalls to Avoid

The biggest mistake I see? Working with lenders who don’t specialize in overseas buyers, and failing to negotiate the terms.

Many lenders claim to have products for non-residents but rarely have good processes for dealing with overseas borrowers. This creates problems with underwriting and remote closings due to lack of experience.

Another common oversight is failing to utilize rate buydowns, which can dramatically improve your investment returns.

Related: Navigating US Mortgage Rate Uncertainty for Foreign Property Investors

The Rate Buydown Strategy

This mortgage hack has transformed my investment approach. I implement it with every property I purchase.

Instead of negotiating a lower purchase price for the property, I negotiate a seller concession. This means paying full price for the property while the seller contributes towards my closing costs.

We then use that contribution to buy down the interest rate. As a rule of thumb, one percentage point paid upfront reduces your interest rate by about 0.25% for the life of the loan.

By paying 4 points upfront, you can reduce your rate by a full 1%. On a $150,000 loan, a $5,500 rate buydown (4 points) translates to interest savings exceeding $36,000 over the loan term.

This strategy also reduces your monthly mortgage payments by over $100, improving cash flow immediately and allowing you to build up cash reserves quicker.

An additional benefit? Tax advantages. Maintaining the higher purchase price increases your cost basis for accounting purposes, enabling larger depreciation deductions from your taxable US income, and potentially lower capital gains taxes when you sell the property.

Related: How Remote Property Investing Has Become Easier and Safer

Current Terms and Requirements

In today’s market, foreign investors can secure mortgages with loan-to-value ratios up to 75%, meaning you’ll need a 25% down payment (plus closing costs and cash reserves).

Interest rates range between 6.75% and 8%, varying by lender and loan structure (LTV etc.).

US Credit Building: Not Necessary for DSCR Loans

One of the most liberating aspects of DSCR loans is that they eliminate the need to build US credit history.

Since these loans focus on property performance rather than borrower credentials, credit history is pretty much irrelevant.

Matching Financing to Investment Strategy

Different investment strategies require different financing approaches:

For short-term flips, hard money or private money loans make more sense. These are typically 12-month (or shorter) loans with higher interest rates and interest-only payments, providing the capital needed to buy, renovate, and sell quickly.

For long-term holds, DSCR loans with LTVs between 60-75% typically offer the best combination of leverage and cash flow.

Related: Guide to US Taxes for Foreign Property Investors

Selecting the Right Lender

Unfortunately, lending scams targeting foreign investors remain common.

The best way to protect yourself is:

• Never pay upfront fees for loan approval
• Verify lender registration with the NMLS (Nationwide Mortgage Licensing System)
• Work exclusively with lenders specializing in overseas borrowers

Related: Best US Property Markets for Foreign Investors

Remote Closing

Foreign property investors have two options when it comes to closing on your investment property in the US…

1. Sign and notarize your closing and loan documents in your home country and get an apostille, then courier the documents to the US in time for closing.

2. Appoint a US-based representative (typically an attorney) who has power of attorney to sign documents on behalf of your LLC.

Either way, you’re going to have to plan for a few extra fees on top of the standard closing costs, so bear that in mind.

Future Outlook

Looking ahead, I expect the market to continue opening up with existing companies solving any remaining friction points, while new entrants to the market will drive competition.

This evolution will ultimately deliver more choice and better value for foreign borrowers.

Related: How to Buy Property in the USA as a Foreigner

Final Thoughts

The financing landscape for foreign investors has transformed dramatically since I began my US real estate journey in 2016.

Today’s specialized mortgage products make remote property investment more accessible than ever before.

By understanding the nuances of DSCR loans, leveraging US LLC structures, and implementing strategies like rate buydowns, foreign investors can build profitable US real estate portfolios with surprising ease.

The key remains working with specialists who understand the unique challenges and opportunities of cross-border real estate investment.