Perhaps you’ve fallen in love with warm, sunny Florida and want to buy a vacation home there. Or maybe you’re thinking about buying a condo in California as an investment property. But if you’re not an American citizen and you live in another country, is it legal to buy a home in the U.S.? What if you live and work in the U.S. with a green card?
Yes, it’s legal in both scenarios—and you may even qualify for a mortgage to purchase your new home. However, before you start scrolling through real estate listings, it’s essential to understand what goes into making a U.S. property purchase as a foreigner.
- Non-citizens buy U.S. property for many reasons, including investment, a place to live or vacation, or asset diversification.
- Many non-citizens buy property in America with cash, although mortgages may be available to qualifying non-citizens.
- A successful transaction depends on getting advice from legal experts in real estate, taxation, and possibly immigration.
Can Non-Citizens Buy Property in the US?
"How difficult is it to buy in the U.S.?" is the most common question fielded by Alicia Cervera Lamadrid, managing partner for Cervera Real Estate/Luxury Portfolio International in Miami, Florida.
People are often surprised by the answer, she said. "It's legally very easy for foreigners to buy in the U.S., and the U.S. is very generous in many ways," said Lamadrid, who works with buyers from all over the world, particularly those located in Mexico, South America, Europe, and the Middle East.
Residential purchases by foreign buyers added up to $54.4 billion between April 2020 and March 2021, according to a 2021 report released by the National Association of Realtors. Buyers are often from Canada, Mexico, China, India, and the United Kingdom. Florida is a leading destination, along with California, Texas, Arizona, and New York.
Why Do Non-Citizens Buy Property in the US?
In the New York City metro area, real estate agent Fiona Dogan has worked with buyers from France, India, Mexico, Australia, South Africa, and Argentina during nearly 20 years with Julia B. Fee Sotheby’s International Realty.
Top reasons to buy property in the U.S. often include the following, Dogan said in an email to The Balance:
- While living and working in the U.S., a family is looking for a primary or secondary home in a comfortable area with good schools and a welcoming community.
- A wealthy foreign investor is able to take advantage of timing and pricing to buy in areas of the U.S. they feel would be a good investment.
- A global company wants to invest in real estate for employees’ living needs.
- A foreign buyer wants to keep some of their assets in the U.S. to diversify their portfolio.
Lamadrid said that short-term rental properties are hot in Miami. Foreign investors can use their property while they’re in town and rent it out when they’re abroad.
Can Non-Citizens Get a Mortgage To Buy Property in the US?
Yes, people who are not American citizens can get mortgages to buy property in the U.S. However, the type of mortgage depends on several factors. Matt Hackett is the operations manager at mortgage lender and servicer Equity Now, which is based in Mamaroneck, New York, and licensed in five states. Hackett explained the details in an email interview with The Balance.
As long as they live in the U.S., people who aren’t U.S. citizens can qualify for most types of loans, including:
- Conventional agency loans such as those backed by Fannie Mae and Freddie Mac
- Federal Housing Administration (FHA) loans
- Jumbo loans
Non-U.S. citizens are generally eligible to purchase all property types, from single-family residences to cooperative units, said Hackett.
Non-citizens and people living abroad can buy U.S. investment properties by pursuing a foreign national loan or foreign national mortgage loan, Hackett said. These non-conforming loans aren’t backed by Fannie Mae or Freddie Mac.
"The terms of these foreign national loans can vary widely, as can the underwriting,” Hackett said. For example, you may need to produce a letter from an accounting firm to verify your income or a letter of reference from a financial institution in your home country.
Foreign national loans don’t typically have the great terms of conventional loans, in Lamadrid’s experience. Higher down payments are often required, interest rates may be higher, and the buyer may have to escrow more money for tax and insurance payments.
How To Buy Property as a Non-Citizen
Buying property as a non-U.S. citizen requires assembling a team of experts to offer proper advice at each stage of the process. Here are the general steps involved.
Find an Experienced Real Estate Agent
Your home search starts with choosing a real estate agent or broker who is local to where you’re planning to buy property. Ideally, they should have experience working with foreign buyers.
"It’s challenging for international buyers to understand the array of state and local rules for handling real estate transactions, including making and negotiating real estate offers," Dogan said. "It’s helpful to have a knowledgeable [agent] to help navigate the differences."
It's also crucial to find an agent who sticks around after you buy the property, Lamadrid added. "That's when your life starts in [your new home]. You need a doctor, need to know what restaurant to go to. Your real estate agent can be your first friend, welcoming committee, and ambassador."
Hire Legal and Financial Professionals
International buyers will likely need to consult with immigration attorneys, international taxation and accounting experts, bank and mortgage loan officers, and local real estate attorneys, Dogan said. Your agent can help steer you to the next layer of experts to guide you through the complex process.
Real estate attorneys are often consulted for advice on legal structures for taking title and taxation. For example, Lamadrid said some foreign buyers want to buy in the name of a corporation for inheritance tax purposes. For others, that might not be the right approach.
The tax laws of more than one country can apply to your purchase, ownership, rental income, and eventual sale of the property. In the U.S., selling property can lead to income tax withholding based on the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). Federal and state laws may impact reporting or filing, depending on the property you purchase.
Foreign buyers of U.S. property will need to apply for an Individual Taxpayer Identification Number (ITIN).
A local attorney with international real estate expertise can help you navigate any international legal or taxation issues. "If people are properly advised, things work out well,” Lamadrid said.
An immigration attorney can help explain the various visas available to you, and can work to ensure you have the right to use the property after purchase, Lamadrid said. "Most people want to have some access to the country as a second home, or buy for their child who will attend college,” she explained, “but as we saw during COVID, that can sometimes be problematic."
Determine Your Financing
Lamadrid’s foreign buyers often use cash to buy U.S. real estate and own a dollar-linked asset. "In the U.S., inflation is new for this generation, but the harsh reality is that there can be 20% inflation in a year or currency devaluation in many countries,” she said. “The dollar is king, so they want to collect as many dollars as possible and buy in cash."
According to the National Association of Realtors report, 39% of foreign buyers in 2021 paid in all cash, almost double the 19% of all buyers of existing homes who purchased in cash. Buyers who lived abroad were more likely to use cash: 61% of non-resident buyers made an all-cash purchase.
Issues around international money transfers can crop up. Due to efforts to keep out dirty and laundered money, moving large sums within and outside the U.S. can be challenging, Lamadrid said. She noted that some nations limit how much cash you can remove from the country every month. Buyers from specific locations may not be able to access cash; for example, people may have frozen assets due to international sanctions. International buyers should consult their financial advisory team to determine the best course of action.
Wiring money internationally may take more time than a domestic wire transfer.
If you decide to apply for a mortgage, documentation requirements vary widely by location and the bank, Hackett said. To qualify for most conventional mortgages, non-U.S. citizens generally need to prove that they are lawful permanent or non-permanent U.S. residents.
Foreign buyers must also meet the bank’s general credit, income, and “legally present in the United States” guidelines for a conventional mortgage. They’ll also need to have a Social Security number or ITIN, and establish a credit history in the U.S.
Find Your Property
"For buyers outside the U.S., the primary challenge may be the inability to view the properties and handle the inspections in person, though we’ve come a long way with FaceTime and virtual tours," Dogan said.
Buying a home online may not be quite as seamless as doing so in person, but most foreign buyers are now comfortable carrying out the initial house hunt virtually. After narrowing down the options, foreign buyers living abroad may ask a broker or representative to take them on a video-call walk-through of the property and neighborhood.
Complete the Transaction
After making an offer, the buyer can also participate virtually in engineering or home inspections. The inspector can use video chat to explain issues and follow up with a written report, Dogan said. Most aspects of the homebuying process will proceed normally; however, the two sticking spots may be transferring cash internationally and the closing process.
Foreign buyers can go to the U.S. consulate or embassy for real estate document notarization, including for purchases, deeds, titles, and financing. However, an electronic notary may also move the purchase forward. "It depends on the bank and may depend on the country," said Dogan.
The Bottom Line
Lamadrid noted that most foreign buyers are savvy and understand they'll need to navigate two different economic and political ecosystems. But the payoff is likely worth it. One of Lamadrid’s foreign clients who invests in U.S. property noted that in exchange for his 33% income tax rate, he benefits from clear construction laws, experienced security teams, and police protection. He receives a working financial system, as well as dependable electrical, water, and sewage systems. "The U.S. helps protect my property and everything I have," Lamadrid’s client told her.
"I want people to know not to be afraid,” Lamadrid said of buying property in the U.S. “The U.S. is a country of laws where property rights are protected."
Frequently Asked Questions (FAQs)
Can foreigners buy a home with an FHA or other government loan?
The FHA insures mortgages made to lawful permanent resident aliens and some non-permanent resident aliens under certain conditions. For non-permanent resident aliens to qualify, the property needs to be their principal residence. The borrower needs to have a valid Social Security number and eligibility to work in the U.S.
How much does it cost to buy a house in the U.S.?
Home prices vary by location, property type, size, and other factors. But home prices per square meter in many U.S. metro areas are relatively less expensive than they are in cities such as London, Hong Kong, Paris, or Toronto, according to the National Association of Realtors. Many U.S. areas offer homes for $4,000 per square meter or less.
Do foreigners have to come to the U.S. to close on the purchase?
Closing processes depend on the bank and your nation. In general, it’s possible to sign electronically or in person at a U.S. consulate or embassy.
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