The Four Types of Non-U.S. Citizen Mortgage Loans

By Bill Lyons | Published on October 11, 2023

Navigating the world of mortgages can be complex, especially if you’re a non-U.S. citizen looking to purchase property in the United States. Various factors come into play, such as visa status, residency, and the property’s intended use. Can a non-U.S. citizen get a mortgage loan? Thankfully, specialized mortgage loan types are tailored to accommodate non-U.S. citizens’ unique needs.

In this guide, we’ll discuss the four main types of non-U.S. citizen mortgage loans to help you determine the best option for you. So whether you’re an expat, a foreign national, or someone with a specific visa type, understanding these loans can pave the way for a smoother mortgage loan process.

Can a Non-U.S. Citizen Get a Mortgage Loan?

In short, the answer is yes. Non-U.S. citizens can qualify for a mortgage for foreign nationals, though the process is different from that of a U.S. citizen. That said, there are many mortgages for foreigners in the U.S.A available, but the one that’s best for you will depend on a variety of factors, such as immigration status, employment status, credit history, duration of stay, and so forth.

For instance, permanent residents with a green card will generally have access to the same mortgage products as U.S. citizens. On the other hand, non-permanent residents or those on work visas might face additional restrictions.

Additionally, some lenders have specialized programs tailored specifically for non-U.S. citizens, recognizing this demographic’s growing demand and potential. Researching and consulting with mortgage professionals with expertise in this area is essential to find the best terms and conditions for your unique situation.

Obstacles to Getting a Mortgage as a Non-U.S. Citizen

One of the primary challenges non-U.S. citizens face when trying to secure a mortgage loan is the lack of a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN). Both of these are unique identifiers that lenders typically use to check an applicant’s creditworthiness.

The SSN is typically reserved for U.S. citizens and eligible U.S. residents for tracking their employment history and contributions to the Social Security system. An SSN is a standard requirement for most traditional mortgage loans.

On the other hand, an ITIN is a number issued by the IRS to individuals who need to report taxes but are ineligible for an SSN. Certain lenders have specific mortgage products tailored for those with an ITIN.

Certain doors might be closed without either of these numbers, but not all. Some lenders and specific programs cater explicitly to foreign nationals or non-resident aliens, bypassing the need for an SSN or ITIN entirely.

Other obstacles to getting a mortgage as a non-U.S. citizen include the following:

• Lack of credit history: U.S. lenders typically rely on credit reports to assess a borrower’s reliability. Many non-citizens, especially those new to the country, might not have a U.S. credit history, making it difficult for lenders to evaluate their creditworthiness.
• Higher down payments: Non-citizens might require a larger down payment to offset the perceived risk to the lender.
• Higher interest rates: Due to the perceived increased risk of lending to foreign nationals, some lenders might offer loans with slightly higher interest rates than those offered to U.S. citizens.
• Limited loan types: Not all mortgage products are available to non-citizens. While some specialized loan types cater to foreign nationals, the choices might be more limited than what’s available to U.S. citizens.
• Documentation hurdles: Non-U.S. citizens might need to provide additional documentation, such as proof of residency, employment verification, a valid visa, and even credit reports from their home country.
• Language and cultural barriers: The mortgage process can be complex and filled with jargon. For non-citizens, especially those with limited English proficiency, understanding terms, conditions, and requirements can be an additional challenge.
• Legal status concerns: Lenders might be hesitant to provide long-term loans to individuals whose residency in the U.S. isn’t guaranteed. For instance, those on temporary visas might find it more challenging than green card holders.

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The Types of Non-Citizens in the U.S.: Permanent Resident Alien vs Non-Permanent Resident Alien

The type of non-citizen status you hold plays a role in the type of mortgage programs available to you. Two primary categories define the majority of non-citizens: permanent resident aliens and non-permanent resident aliens. Understanding the distinctions between these groups is crucial, especially when considering the various mortgage options tailored to each.

Permanent Resident Alien Definition

Permanent resident aliens, often referred to as green card holders, have been granted the right to reside in the U.S. indefinitely. They enjoy many of the same rights as U.S. citizens, with a few exceptions. In general, mortgage options for permanent resident aliens are similar to those for U.S. citizens and include conventional loans, FHA loans, and VA loans if they’ve served in the military.

Griffin Funding offers various loan options for those with green cards and Social Security numbers through our non-QM loan programs, including full documentation, bank statement, DSCR, asset-based, and interest-only loans.

Non-Permanent Resident Alien Definition

Non-permanent resident aliens have been allowed to live and work in the U.S. for a specific period. Their status is typically tied to employment or another qualifying reason, and they carry visas that detail the terms of their stay. These individuals can qualify for a mortgage under the non-permanent resident alien or ITIN loan programs. With these loans, borrowers don’t require an SSN and can finance primary residences, second homes, and investment properties.

Four Types of Mortgages for Foreign Nationals and Non-Residents

As discussed, various types of mortgages for foreign nationals are tailored specifically to meet the unique needs of individuals from outside the U.S. These loans are designed keeping in mind the peculiarities of their financial profiles, credit histories, and residency statuses. To aid foreign nationals and non-residents in understanding their options, let’s take a look at the four types of non-U.S. citizen mortgage loans.

Foreign national loans

One of the enticing aspects for foreign nationals looking to invest in U.S. properties is the tax benefits of investing in real estate, which can offer substantial savings and increased profitability for investors. Often used as a catch-all term, foreign national loans are non-QM loans that cater explicitly to non-U.S. citizens looking to invest in U.S. real estate. These loans are not subject to the same regulations as conventional mortgages and, therefore, can be more flexible in terms of criteria and requirements.

Foreign national loans are designed to help non-residents secure a mortgage without an SSN, green card, or visa. Additionally, borrowers aren’t required to have a FICO score and may demonstrate creditworthiness through alternative means, such as submitting a credit report from their home country.

Griffin Funding offers a variety of foreign national loans designed for those who don’t have an ITIN through our non-QM loan programs. These offerings include:

• Full documentation: These loans are ideal for borrowers who can provide comprehensive financial records to showcase their creditworthiness.
• Debt service coverage ratio loans: These loans focus on the property’s ability to pay for itself and are only available for investment properties because they consider the rental income of the property rather than the borrower’s personal income. Understanding DSCR loan benefits can give potential borrowers insight into how these loans might suit their specific financial situations and investment strategies.
• Interest-only loans: These loans offer borrowers the flexibility to pay just the interest for a specific period, making it an attractive option for those with varying incomes or those looking for short-term investment properties.

Foreign national loans are especially advantageous for non-U.S. citizens eager to purchase property and want to avoid the many potential challenges in securing traditional mortgage loans due to their non-resident status.

ITIN loans

ITIN loans are designed for individuals who are ineligible to obtain a Social Security number but can have an Individual Taxpayer Identification Number (ITIN). The IRS issues the ITIN to help foreign nationals comply with U.S. tax laws and provide a way to process tax returns and payments for those not eligible for SSNs.

ITIN loans are tailored for foreign nationals who earn an income in the U.S. and need a mortgage to buy a home. This includes everyone from freelancers to contractors and entrepreneurs who pay U.S. taxes but might not have the residency or immigration status typically required for traditional loans.

Unlike conventional loans, ITIN loans don’t require an SSN and rely on the tax identification number. Many lenders also have tailored programs that cater to ITIN holders, understanding their unique financial profiles and needs. And, for many non-residents, ITIN loans provide the only viable path to homeownership in the U.S..

Beyond offering a means to homeownership, ITIN loans are also flexible. Many lenders offer competitive interest rates and favorable terms for ITIN loans, understanding that this demographic is often diligent about repayments. Also, some ITIN loan programs might allow for higher debt-to-income ratios or accept non-traditional credit references, like utility bills and rent payment records.

ITIN loans can serve as a stepping stone for non-residents, enabling them to build a credit history in the U.S. By maintaining regular payments and showcasing financial responsibility, borrowers can improve their creditworthiness, which could be beneficial in future financial pursuits.

Permanent resident alien loans

Non-citizens permanently living in the U.S. who are green card holders can purchase primary residences, second homes, and investment properties with a permanent resident alien loan. The official immigration status grants green card holders to work and live in the country permanently with available loan types ranging from conventional loans to non-QM loans like:

• Full documentation
• Bank statement loans
• Debt service coverage ratio loans
• Asset-based loans
• Interest-only loans
• Recent credit event loans

In general, green card holders face fewer hurdles in the loan application process. Their permanent resident status demonstrates their long-term commitment to residing in the country, which translates to greater trust and credibility in the eyes of lenders.

Permanent resident aliens have the benefit of building a credit history over time, much like U.S. citizens. As they work, pay taxes, and engage in other financial activities, their credit profiles develop. As you know, a robust credit history can pave the way for better loan opportunities and terms while widening the variety of loan offerings available to them.

By maintaining a good credit score, permanent resident aliens can ensure they’re viewed as low-risk borrowers, leading to more competitive loan offers.

Non-permanent resident alien loans

Non-permanent resident aliens residing in the U.S. for a specific purpose and defined period, usually under visas like H1-B, L-1, or other work-related visas. Loans available to these individuals require a U.S. Social Security number and U.S. FICO score.

We offer a variety of loan options for non-citizens with a visa and Social Security number, such as:

• Full documentation
• Bank statement loans
• Debt service coverage ratio loans
• Asset-based loans
• Interest only loans
• Recent credit event loans

Keep in mind that when applying for a non-permanent resident alien loan, one of the essential criteria is having a valid visa. Lenders want to ensure that borrowers have the legal right to live and work in the U.S. for the foreseeable future, ideally for the duration of the loan or longer. While the loan’s term might outlast the current visa, lenders often look for evidence or likelihood of visa renewal, ensuring that the borrower continues to have a steady income source in the country.

Lenders recognize that non-permanent resident aliens have unique financial profiles. Often, these individuals might have substantial assets or credit history in their home countries but may not have had the time or means to establish a strong credit profile in the U.S.. Consequently, certain lenders have specialized programs that consider global credit reports or bank statements.

While there are loan options available, non-permanent resident aliens may face stricter scrutiny during the application process. Some lenders might require a larger down payment or charge a higher interest rate to offset the perceived risk associated with lending to non-permanent residents.

Tips for Getting a Mortgage as a Non-U.S. Citizen

Getting a mortgage can be challenging for anyone, but non-U.S. citizens may encounter unique challenges that make the journey a bit more complex. However, with the right approach and being strategic, these individuals can improve their chances of securing a mortgage and getting favorable terms. Here are a few tips to help you get a mortgage as a non-U.S. citizen:

Get your documentation in order

One of the first and most important steps in ensuring a smooth mortgage application process is gathering and organizing all necessary documentation. Lenders prioritize verification and want assurances that borrowers are in a strong financial position to repay the loan. For non-U.S. citizens, the list of required documents is slightly different from those for U.S. citizens. Key documents may include:

• Valid visa/work permit: This document demonstrates your legal status in the U.S. and can be crucial for lenders to gauge the potential length of your stay.
• Green card: For permanent residents, the green card indicates your permanent residency and your right to work and live in the U.S. indefinitely.
• Proof of income and assets: Pay stubs, tax returns, or bank statements can act as evidence of your financial stability.
• ITIN number: if you don’t have a Social Security number, an ITIN is essential, especially for tax reporting.
• Proof of creditworthiness: This could be a credit report from your home country or a letter from a previous lender attesting to your reliability. Some lenders may even allow for alternative forms of credit reporting, like rental payment history.

Ensuring that you have all these documents at your fingertips when approaching a lender can speed up the process and give them confidence in your application.

Build credit in the U.S.

Having a robust credit history is a cornerstone of any mortgage application. This can be a hurdle for many non-U.S. citizens, especially if they’ve recently moved to the U.S. and haven’t had a chance to build a credit profile. Here are a few ways you can begin building credit in the U.S.:

• Start small: Consider opening up a U.S.-based bank account and getting a secured credit card. Secured cards are easier to obtain and can be instrumental in helping you build credit from the ground up.
• Pay bills on time: Ensure that you consistently pay all your bills on time, including credit cards, utilities, rent, and other monthly obligations.
• Avoid excessive debt: While taking on some debt is good for building credit, ensure it’s manageable and doesn’t jeopardize your financial health.
• Be patient: Building a solid credit history takes time. Maintain good financial habits, and your efforts will pay off over time.

Provide a large down payment

A larger down payment when seeking a mortgage can demonstrate your commitment and financial capability. This strategy might be especially beneficial for non-U.S. citizens, given the potential uncertainties lenders might perceive.

From a lender’s perspective, a more significant down payment decreases the loan-to-value (LTV) ratio. This means the lender is loaning a smaller percentage of the property’s total value, inherently reducing their risk. If a borrower defaults on their loan, the lender has a better chance of recouping their money through selling the property.

Moreover, if you have substantial funds, making a cash offer on a property might be an option. While this doesn’t involve traditional mortgage financing, a cash offer often makes the buying process faster and gives you an edge in competitive housing markets.

Additionally, a larger down payment also typically gets borrowers more favorable interest rates. A reduced rate, even if it’s just a small amount, can translate to substantial savings over the life of the loan. In addition, you can avoid private mortgage insurance (PMI) with a larger down payment, potentially greatly reducing your monthly cost.

Keep in mind that a larger down payment should never deplete your savings. You should maintain a cushion for emergencies or unexpected expenses. Additionally, it might be worth weighing the opportunity cost to determine if that money may have been better invested somewhere else with a higher return.

Work with a trusted lender

The process of getting a mortgage can be especially daunting for non-U.S. citizens. However, working with a trusted lender can streamline the process and eliminate any complexities. A trusted lender often brings years of experience to the table. They can guide you through the intricacies of the mortgage process, offering advice tailored to your unique situation as a non-U.S. citizen.

Whether it’s understanding the nuances of documentation or explaining the implications of different loan types, an experienced lender can help. Additionally, established lenders have a broad portfolio of loan products. They can recommend mortgage options that align better with your financial situation and long-term goals, ensuring you get the right loan for you.

Learn About Your Options for a Mortgage Loan as a Non-U.S. Citizen

Navigating the complex maze of the U.S. mortgage system can be particularly challenging for non-U.S. citizens. However, equipped with the right knowledge and guidance, the dream of homeownership can become a reality.

Griffin Funding has consistently stood as a leading mortgage provider for non-U.S. citizens. Our experienced team understands the challenges non-citizens face, ensuring that your home-buying journey is as smooth and hassle-free as possible. From offering diverse home loans to providing continuous, transparent communication, we pride ourselves on being the go-to financing partner for many aspiring homeowners.

So, while the path to homeownership for non-U.S. citizens may come with its unique challenges, the opportunities and options available make the journey worthwhile. By arming yourself with knowledge and choosing a trusted lender like Griffin Funding, your dream of owning a home in the U.S. is within reach. Apply for a mortgage online today.

Bill Lyons

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.