Can a Non-U.S. Citizen Get a Home Loan?
Many legal residents of the United States who are not United States citizens are unaware that they can buy a home and obtain a mortgage. The American dream of home ownership is available now for these residents.
Mortgage loans to buy a home are available both to United States citizens and lawful permanent or non-permanent residents of the United States. Fannie Mae, Freddie Mac and the FHA program all have similar rules and the loan products available to these borrowers are the same mortgage programs at the same rates and terms as for United States citizens. There is no extra cost, fees or higher interest rates if you are borrow as a non citizen.
There is no specific set of documents required to establish that a resident is living in the United States under a legally valid situation. Permanent resident aliens will be issued a green card by the U.S. Immigration and Naturalization Service (INS). Non-permanent resident aliens will usually have a visa and passport. There are many different types of visas with numerous benefits and restrictions.
Borrowers with residency documentation that expires in the near future may still be able to obtain a loan at the discretion of a mortgage underwriter.
Borrowers must also demonstrate that they have been in the United States for at least two years.
Home buyers must demonstrate a credit history
A two-year credit history within the United States with a valid credit score is the ideal scenario. However, home buyers can assemble a credit report with three traditional credit trade lines or four non-traditional trade lines. If a borrower has a credit history from a foreign independent credit reporting agency, that report can be used in place of a traditional credit report. Alternatively, the borrower can obtain written verification from foreign creditors, and that history can be used to establish a credit history for the borrower.
There are some borrowers who do not have a Social Security number but instead have a "ITIN" number. These numbers are for borrowers who do not have residency status, but are working in the United States and paying taxes on their earnings. For example, many individuals who are in the United States seeking political asylum or refugee status have this type of status.
ITIN borrowers must have an employment history of at least two years and the lender must make a reasonable determination that their income will continue for at least three years.
Some borrowers who work in the United States -such as diplomats -are not subject to U.S. taxes and as a result have no income tax returns, W2s or other income documentation. In these cases, most lenders will permit borrowers to prove their income with verification of employment letters from the entity where they work.
Another issue that arises is verifying funds for a down payment and closing costs. Normally borrowers need to show that they have had assets for at least two months in order to count those assets as your own funds. However, many non-citizens have funds in foreign bank accounts. Borrowers can count those funds as their own if they are able to document that the funds belong to them in the foreign country and if they transfer the funds to a U.S. bank account prior to closing.
While there are extra steps and extra qualifications, non-citizens have multiple mortgage financing options available to buy homes.
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