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

US Mortgages for Foreigners: A Guide for Global Buyers

Published On: June 14th, 2025

I’ve purchased over 120+ investment properties in the US as a Non-Resident Alien (Foreigner). I’ve used financing of one kind or another for every single one of my purchases, including; hard money loans, private money loans, and DSCR loans. Access to good value ‘easy’ financing for foreign property buyers in the the USA has evolved significantly since I started investing in 2016. It’s now much easier for foreigners to get approved for mortgages in the US, but it’s critical to understand what options are available, and utilize the right kind of financing that aligns with your investment strategy and long-term goals.

This comprehensive guide is designed to demystify US mortgage options for foreign nationals, providing essential information for international investors from the UK, Canada, Australia, and Latin America, as well as other global buyers. We’ll explore the available financing avenues, key eligibility criteria, and important considerations to help you confidently finance your U.S. property purchase.

Key Takeaways:

• Specialized Loans: Foreign nationals often rely on specific loan products like DSCR and Traditional Foreign National Mortgages.
• Alternative Financing: Private money and hard money loans offer flexible, short-term solutions, particularly for distressed properties or quick acquisitions.
• Flexible Requirements: Lenders can accommodate non-U.S. credit histories and foreign income verification.
• Higher Down Payments: Expect larger down payment requirements compared to domestic buyers.
• Region-Specific Nuances: Each country of origin may present unique considerations for the US mortgage process.
• Expert Guidance is Key: Partnering with a specialist lender can significantly streamline your journey.

Table of Contents

Understanding US Mortgages for Foreign Nationals

For non-U.S. citizens looking to buy property in the United States, traditional conventional mortgages such as FHA loans are typically out of reach due to the absence of a Social Security Number (SSN) and U.S. credit history. However, the market has evolved to offer more tailored solutions – primarily for investment properties or second homes. While options for primary residences exist, most lenders focus on foreign national loan programs for non-owner occupied properties.

1. DSCR (Debt Service Coverage Ratio) Loans

DSCR loans are a popular choice for international investors acquiring income-generating properties. What makes them particularly attractive is their how the lender underwrites the loan: they approve the loan based on the property’s potential rental income, rather than the borrower’s personal income or U.S. credit score.

• How it works: The lender assesses the property’s ability to generate enough income to cover its mortgage payments, typically requiring a Debt Service Coverage Ratio (DSCR) of 1.0 or higher (meaning the property’s net operating income covers its debt service). Many lenders prefer a DSCR of 1.25 or greater.
• Ideal for: Real estate investors focused on rental properties who may not want to disclose personal global income or who have complex income structures. I use DSCR loans to purchase or refinance all of my rental properties in the United States.
• Typical Loan Terms:
  • Loan-to-Value (LTV): Often 70-75% (requiring a 25-30% down payment).
  • Interest Rates: Generally slightly higher than traditional U.S. conventional loans, but competitive for foreign national programs. They can be fixed or adjustable. Currently DSCR loans for foreigners are available with interest rates between 6.75% and 7.75%. Interest rates are usually fixed for the full term of the loan (up to 30 years).
  • Fees: Include origination fees (1-3% of loan amount), appraisal fees, and typical closing costs. There may also be a lock-in period with fee and penalties for early repayment in the first 1 to 5 years.

GET PRE-APPROVED TODAY: Schedule a call with our US real estate investment experts and get-pre-approved for your US mortgage today

2. Traditional Foreign National Loans

These loans are designed for non-US citizens who may or may not intend to generate rental income from the property, but who still require financing without a typical U.S. financial footprint.

• How it works: While personal income is usually a factor, most lenders with foreign national programs are equipped to verify foreign income, assets, and sometimes even international credit reports. They understand that a U.S. SSN and FICO score might be absent.
• Ideal for: Buyers seeking a second home, vacation property, or investment property where the DSCR model might not apply or be preferred.
• Typical Loan Terms:
  • Loan-to-Value (LTV): Typically 75-85% (requiring a 15-25% down payment), depending on the property type and borrower profile.
  • Interest Rates: Similar to DSCR loans, often a bit higher than U.S. domestic rates, but competitive within the foreign national market. Can be fixed or adjustable.
  • Fees: Standard origination fees (1-3%), underwriting fees, appraisal costs, and customary closing costs. Like DSCR loans, there may also be a lock-in period with fee and penalties for early repayment in the first 1 to 5 years.

GET PRE-APPROVED TODAY: Schedule a call with our US real estate investment experts and get-pre-approved for your US mortgage today

3. Private Money Loans

Private money loans are non-bank loans typically provided by individuals or private companies rather than traditional financial institutions. These loans are often secured by real estate and are characterized by their flexibility and speed, making them a viable option for foreign investors in specific situations.

• How it works: Lenders focus heavily on the equity in the property being financed and the borrower’s overall financial strength and exit strategy, rather than strict credit scores or traditional income verification. Terms are negotiated directly between the borrower and the private lender.
• Ideal for: Experienced foreign investors looking for quick closings, flexible terms, or financing for unique or distressed properties that might not qualify for conventional or even foreign national bank loans. They are often used for short-term projects like fix-and-flips or as bridge financing.
• Considerations: Interest rates are typically higher than traditional mortgages, and terms are usually shorter (e.g., 1-5 years).
• Typical Loan Terms:
  • Loan-to-Value (LTV): Often lower, around 50-70% of the property’s value (requiring a 30-50% down payment), as the asset is the primary collateral. Some private lender might offer up to 80% of the purchase price if the property is being purchased at a discount to it’s market value or after repair value.
  • Interest Rates: Significantly higher than traditional or foreign national bank loans, typically ranging from 8% to 15% or more, depending on risk and market.
  • Fees: Include upfront points (often 2-5% of the loan amount) and various administrative fees, adding to the overall cost.

4. Hard Money Loans

Hard money loans are a specific type of private money loan, usually asset-based, where the loan is secured primarily by the value of the underlying real estate itself, often a distressed or non-owner-occupied property. They are typically short-term, high-interest loans used by investors for quick acquisitions or rehabilitation projects.

• How it works: Approval is based more on the property’s value and potential (its “hard asset” value) rather than the borrower’s credit or income. They offer extremely fast funding.
• Ideal for: Foreign investors needing very rapid financing for time-sensitive opportunities, such as auction purchases, distressed properties requiring significant renovation, or properties that don’t meet traditional lending criteria. They are almost exclusively used for investment purposes and are often refinanced into a long-term loan (like a DSCR loan) once the property is stabilized.
• Considerations: Hard money loans come with very high interest rates and fees, and shorter repayment periods (often 6-24 months). They are not suitable for long-term holds.
• Typical Loan Terms:
  • Loan-to-Value (LTV): Generally lower than private money loans, often 50-65% of the “as-is” value, or up to 70-75% of the “after-repair value” (ARV) for renovation projects.
  • Interest Rates: Among the highest in the market, often 10% to 18% or more, reflecting the high risk and short term.
  • Fees: High upfront points (often 3-5% of the loan amount) and other fees are common, making them expensive but fast.

Eligibility & Requirements for International Borrowers

Getting approved for a US mortgage as a foreigner involves different criteria than for U.S. citizens. Lenders specializing in foreign national mortgages are typically well-equipped to assess your financial profile using alternative documentation.

The documentation required varies between loans types. Typically, a DSCR loans requires far less documentation and/or verification due to the underwriting process. In many cases, a DSCR lender will not require proof of income or a credit report.

Residency Status & Visas

• No Green Card Required: Many foreign national loan programs do not require you to have a U.S. Green Card or even a U.S. visa, especially for investment properties (DSCR loans).
• Visa Holders: If you hold a valid U.S. visa (e.g., E-1, E-2, L-1, H-1B), some lenders may offer specific programs or slight variations in terms, though it’s not universally mandatory.
• Non-Resident Status: The core of foreign national lending caters specifically to those who reside outside the U.S.

Credit History For Foreign National Loans

• No U.S. Credit History? No Problem: This is a common hurdle. Foreign national lenders understand you likely won’t have a FICO score.
• International Credit Reports: Some lenders may accept credit reports from your home country. Be prepared to provide comprehensive reports, often with a minimum 12-24 month history.
• Alternative Credit Data: This might include verified payment histories for rent/mortgage, utility bills (electricity, water, internet), or insurance premiums for the past 12-24 months. Providing bank reference letters from your primary bank can also be helpful.
• Banking Relationship: A strong, long-standing relationship with a reputable bank in your home country is often viewed favourably.

Income Verification For Foreign Mortgages

• Foreign Income Accepted: If you are using a loan that requires proof of income, lenders will verify income from your country of residence. This typically includes:
  • Bank Statements: Personal and/or business bank statements (often 12-24 months) showing consistent deposits.
  • Employment Verification: Letters from employers, employment contracts, or recent pay stubs. Ensure all foreign-language documents are professionally translated into English by a certified translator. It’s often advisable to have these translations notarized or apostilled, as specific lenders and states may require it.
  • Tax Returns: Tax returns from your home country may be requested, sometimes for the past two to three years.
• Asset-Based Qualification: Some programs can qualify based on liquid assets, particularly for high-net-worth individuals, reducing the emphasis on traditional income documentation.

Down Payment Expectations

• Higher Down Payments are Standard: Due to the perceived higher risk for lenders, foreign national mortgages typically require larger down payments than loans for U.S. citizens.
• Typical Range: Expect to put down anywhere from 20% to 40% of the property’s purchase price, depending on the loan type, property, and lender. DSCR loans for investment properties may sometimes require slightly higher down payments. Hard money loans might allow lower initial down payments but compensate with higher interest/fees.
• Proof of Funds: Lenders will require documentation (e.g., bank statements) proving the source and availability of your down payment funds. This is a critical step to ensure compliance with international and US anti-money laundering regulations.

Financial Reserves

• Lenders often require borrowers to demonstrate liquid financial reserves (e.g., funds readily accessible in checking, savings, or easily liquidated investment accounts) equivalent to several months of mortgage payments (Principal, Interest, Taxes, Insurance – PITI) after the down payment and closing costs. This proves your ability to service the debt even if your income stream experiences minor fluctuations. The exact amount depends on a range of factors, but you should budget for at least 3 months of loans payments. Some lenders will require up to 12 months reserves.

Dedicated Regional Insights

While the general requirements apply, specific nuances often arise based on your country of origin.

For Our UK Investors: Navigating US Mortgage Options

UK investors like me have long been active in the US real estate market. When seeking a US mortgage for UK citizens, consider:

• Currency Fluctuations: The GBP/USD exchange rate can impact your effective loan amount and monthly payments. Many UK buyers will hedge against this or seek advice on managing currency risk with currency exchange specialists.
• Credit History: As a UK resident, you won’t have a US credit score. Lenders will focus on alternative methods, potentially reviewing your UK credit history (if convertible/understandable) or bank statements. Providing a strong banking reference letter from a UK institution can be highly beneficial.
• Common Destinations: Florida, California, and New York are popular states for lifestyle buyers seeking a second home. Investors looking for cashflow and equity growth should focus on the Midwest and Northeast. You can read my guide to the best US property markets for foreign investors here.
• Tax Advice: Always seek independent U.S. and UK tax advice to understand dual taxation agreements and reporting requirements, such as FIRPTA. you can read my own guide to US real estate taxes for foreigners here.
• Investment Structure: It’s critical to ensure you set up your investment structure correctly to protect your personal liability and ensure tax-efficiency. There are various options to consider based on your own investment and tax planning goals. You can read my own guide to structuring your US property investment here.

Canadian Buyers: Financing Your US Property Purchase

The “snowbird” phenomenon means many Canadians buying US property seek financing, often for winter homes.

• Cross-Border Banking: Canadian banks with a U.S. presence (like RBC Bank or TD Bank) often have specialized cross-border mortgage programs that can leverage your Canadian credit history and banking relationship. This can significantly simplify the process and documentation.
• Popular States: Florida, Arizona, California, and Texas are perennial favourites for Canadian snowbirds due to proximity and climate. Canadian investors who want to own US rental properties for cashflow and equity growth should focus on markets in the Midwest, South, and Northeast.
• Understanding US Homebuying Process: While real estate processes share similarities, ensure you work with professionals (realtors, lawyers, lenders) familiar with cross-border transactions and potential differences in closing procedures.
• Canadian Regulations: Be aware of any Canadian regulations that might impact overseas property ownership or capital transfers, though the recent foreign buyer ban in Canada applies to Canadian property, not US.
• Investment Structure: Canadians should be very careful about how they structure their US property investment. Using the wring type of entity could lead to double taxation. While the right solution depends greatly on the specific circumstances of the individual buyer, an Limited Partnership is usually the simplest and most tax-efficient solution.

Australian Investors: Navigating US Real Estate Mortgages

Australian investing in US real estate mortgage is a growing trend, driven by diversification goals.

• Income Verification: US lenders will typically require robust documentation of your income from Australia, including employment contracts, payslips, and potentially tax returns for multiple years.
• LTV Expectations: While some Australian expat loans might offer up to 85% LTV within Australia, for US properties, you will likely face the standard foreign national LTVs (e.g., up to 70-80%).
• Remitting Funds: Plan for international money transfers for your down payment and closing costs, considering exchange rates and transfer fees. Using a specialized foreign exchange service can help optimize transfers.
• Tax Considerations: Understand the tax implications in both Australia and the U.S., particularly regarding rental income, capital gains, and potential estate taxes. FIRPTA is a key consideration when selling.
• Investment Structure: Many Australians use their Self-Managed Superannuation Fund (SMSF) to invest in US properties. Typically, they will set up a US LLC to hold each property, and the SMSF will own the LLC. You can read my guide on structuring your US property investment here.

US Mortgage Options for Buyers from Latin America

Latin American buyers represent a significant segment of the US mortgage for foreigners market, particularly in states like Florida and Texas.

• ITIN vs. SSN: Many buyers from Latin America may have an Individual Taxpayer Identification Number (ITIN) for U.S. tax purposes but no SSN. Lenders specializing in ITIN loans can cater to this, often with similar requirements to general foreign national loans.
• Source of Funds: Rigorous documentation for the source of funds for your down payment and reserves is often required due to international financial regulations. Be prepared to provide clear, traceable records.
• Banking Relationships: A strong banking history in your home country, along with clear asset statements, will be critical for loan approval. Some buyers may also establish a U.S. bank account early in the process.
• Language & Cultural Nuances: While many professionals speak Spanish or Portuguese, official documentation will need to be in English (and often notarized/translated by a certified translator).
• Popular Hotspots: Miami, Orlando, Houston, and Los Angeles are frequently targeted by international investors from Latin America, driven by cultural ties, investment potential, and accessibility. Other investors buying purely for investment purposes should look for cash-flowing rental properties in these US markets.

The US Mortgage Loan Process for Foreign Nationals

While similar to a domestic mortgage process, there are specific steps and considerations for non-U.S. buyers:

1. Determine Your Budget & Loan Type: Before looking at properties, understand what you can realistically afford and which loan product (DSCR, Traditional Foreign National, Private Money, Hard Money) best suits your needs and the property type.
2. Choose a Specialist Lender: Select a mortgage lender that explicitly specializes in foreign national mortgages. This could be a large international bank with a US presence, a dedicated foreign national loan broker, or a digital-first platform. They will have the expertise and loan products tailored for your situation. For private or hard money, seek out reputable private lenders or brokers specializing in asset-based loans.
3. Pre-Approval: Get pre-approved. Depending on the type of loan, this involves submitting initial documentation (foreign bank statements, income proof) to determine your borrowing capacity. A pre-approval letter is often essential when making offers on properties, showing sellers you are a serious and qualified buyer. If you are using a DSCR loan, you will need to find a property first and submit the details to get a pre-approval.
4. Property Search & Offer: Work with a U.S. real estate agent who understands the foreign buyer market and is familiar with the needs of international clients. You can find US investment properties pre-approved for foreign financing in our own US property investment portal.
5. Gather Required Documentation: Provide all necessary financial documents, identification (passport), and residency proofs (if applicable). Be prepared for detailed verification of foreign income and assets.
6. Underwriting: The lender assesses your complete application. This phase may involve additional requests for information unique to foreign borrowers, and patience is key. For private/hard money, underwriting is faster but focuses heavily on the property’s value and your exit strategy. This phase can be the longest, so patience and prompt responses to additional requests are key.
7. Appraisal & Title Search: The property will be appraised to confirm its value, and a thorough title search conducted to ensure clear ownership.
8. Closing: Sign the loan documents. This can sometimes be done remotely via power of attorney, through a U.S. consulate/embassy, or in person. Funds for closing costs (separate from the down payment, typically 2-5% of the loan amount) will be required.

Common Challenges & Important Considerations

• Currency Exchange Risk: Fluctuations in exchange rates can affect your down payment, monthly payments, and future rental income (if applicable).
• Legal & Tax Implications: U.S. property ownership for foreign nationals has specific legal and tax implications (e.g., FIRPTA, estate tax, income tax on rental income). Always consult with U.S. and home-country tax advisors and attorneys before purchasing to ensure compliance and optimize your investment structure. International tax laws are intricate, and professional advice is essential to avoid unforeseen liabilities and optimize your investment structure. you can read my guide to U.S. real estate taxes for foreign investors here.
• Property Management: If buying an investment property, consider how it will be managed from abroad (e.g., engaging a reputable property management company).
• Local Market Knowledge: Understanding local market dynamics, property taxes, potential HOA (Homeowners Association) fees, and landlord-tenant laws (if renting out) is crucial.

Why Partner with a Specialist US Foreign National Lender

Navigating the U.S. mortgage landscape as an international buyer can be complex. Partnering with a lender who has deep expertise in foreign national mortgages offers significant advantages:

• Tailored Solutions: Access to loan programs specifically designed for non-residents, often with flexible underwriting criteria that accommodate international financial profiles.
• Streamlined Process: Specialists have experience in handling foreign documentation, income verification, and cross-border logistics, which can significantly reduce potential delays and frustration.
• Expert Guidance: Professionals who understand the nuances of international finance and common challenges faced by buyers from the UK, Canada, Australia, and Latin America. They can provide insights on everything from the best loan product to connecting you with other necessary professionals.
• Higher Approval Rates: A specialist understands how to present your unique financial profile to underwriters, increasing your chances of approval. For instance, I recently helped a UK investor secure a DSCR loan for a 3-unit triplex apartment building in Cleveland, without a U.S. credit history or proof of income, by leveraging our strong relationships with our panel of specialist lenders, and providing a detailed pro forma for the property’s rental income.

Conclusion

With the range of specialist lenders and financing options that are available today, the dream of owning U.S. real estate is within reach for international investors and foreign nationals worldwide. While the financing process differs from that of domestic buyers, specialized US mortgage options for foreigners provide multiple purchasing options to suit a range of investment strategies. By understanding the available loan products, preparing your documentation, and partnering with a knowledgeable lender or international buyer representative, you can confidently navigate the market and achieve your investment goals.