Lenders for Non-US Resident Investors

8 Replies

Hi

What is the best bet for an overseas investor wanting to take a mortgage for rental property in the US?  

(To be clear, I am a US Citizen.  I currently own a home in USA with a nearly paid off mortgage from a Credit Union.)  

I would like to start buying SFH or small Multi-family properties for cashflow investment. I should have realized this earlier, but my CU just informed me that they cannot underwrite an investment loan if I am not in-residence. They also checked with affiliate lenders and Fannie/Freddie who said the same thing.

I could do an all cash purchase fairly easily, but the cash on cash return gets so low at that point to be less attractive.  Not to mention that it would be then end of my ability to invest for a while as opposed to being able to assemble a small portfolio with leverage.  

What do people in this situation normally do for lenders?  I'm sure there are options, but honestly not quite sure where to look.

Thanks!

Originally posted by @Daniel Mulberry :

Hi

What is the best bet for an overseas investor wanting to take a mortgage for rental property in the US?  

(To be clear, I am a US Citizen.  I currently own a home in USA with a nearly paid off mortgage from a Credit Union.)  

I would like to start buying SFH or small Multi-family properties for cashflow investment. I should have realized this earlier, but my CU just informed me that they cannot underwrite an investment loan if I am not in-residence. They also checked with affiliate lenders and Fannie/Freddie who said the same thing.

I could do an all cash purchase fairly easily, but the cash on cash return gets so low at that point to be less attractive.  Not to mention that it would be then end of my ability to invest for a while as opposed to being able to assemble a small portfolio with leverage.  

What do people in this situation normally do for lenders?  I'm sure there are options, but honestly not quite sure where to look.

Thanks!

 You are a non resident US person? It is curious, I thought you could get a conforming mortgage.

As foreign person, you can try HSBC mortgage, otherwise US micro-banks (the smaller, the better) have portfolio loan department and will lend to foreigners.

Cash on cash return is an affordability and solvency measure. The factor that determine profitability enhancement afforded by the financing is the difference between the cap rate and mortgage APR. see http://www.investor-realestate-accounts.com/wiki/P...

I’m US overseas right now and went through a smaller bank in my area I’m investing in. Keep looking and asking around on here and you’ll find one that is recommended.

I’d also recommend finding an investor minded realtor, preferably one with investments themselves, and ask them who they recommend for financing. That’s how I found the man I’m working with.

You won’t be able to get the good Owner occupied rates but you’ll get what you need. 

If you follow similar guidance from any “Out of State” investors it will work the same for you.

Good luck out there!

Originally posted by @Sebastien Hitier :
Originally posted by @Daniel Mulberry:

Hi

What is the best bet for an overseas investor wanting to take a mortgage for rental property in the US?  

(To be clear, I am a US Citizen.  I currently own a home in USA with a nearly paid off mortgage from a Credit Union.)  

I would like to start buying SFH or small Multi-family properties for cashflow investment. I should have realized this earlier, but my CU just informed me that they cannot underwrite an investment loan if I am not in-residence. They also checked with affiliate lenders and Fannie/Freddie who said the same thing.

I could do an all cash purchase fairly easily, but the cash on cash return gets so low at that point to be less attractive.  Not to mention that it would be then end of my ability to invest for a while as opposed to being able to assemble a small portfolio with leverage.  

What do people in this situation normally do for lenders?  I'm sure there are options, but honestly not quite sure where to look.

Thanks!

 You are a non resident US person? It is curious, I thought you could get a conforming mortgage.

As foreign person, you can try HSBC mortgage, otherwise US micro-banks (the smaller, the better) have portfolio loan department and will lend to foreigners.

Cash on cash return is an affordability and solvency measure. The factor that determine profitability enhancement afforded by the financing is the difference between the cap rate and mortgage APR. see http://www.investor-realestate-accounts.com/wiki/P...

 Thanks for this.  I'll look through that link and try to get a better handle on options.  I was committed to a certain strategy for so long that I haven't though through other options so thoroughly.

The non-resident issue is one that shouldn't have surprised me.  We had a similar issue with a brokerage a couple of years ago and had to close some accounts with them.  I can't say that I know the details, but I take it that there are money-laundering concerns, our brokerage issue came around the same time that FACTA/F-Bar started being a bigger issue for our international banking as well.  I guess you must have similar issues in Hong Kong.

@Steven Dreyer

Thanks for this.  I'll start exploring local banks and see what I come up with.

Hi Daniel,
You can pursue specialized lenders for investors since we often lend to non-residents and foreign nationals. The challenge would be finding the right program. Not everyone can offer lending for just one small multi or SFR.

Understanding the requirements will you with meeting your goals. The money is absolutely out there to help you with leveraging your next purchase. If you have any more questions or want more details feel free to message me or email at any time.

Credit unions are very particular about their geo.  I have seen the large banks, citi, B Of A, etc offering loans for foreign nationals.  While you re a US citizen they may classify you that way.  Look for banks that are HQ where you are located and do business in the US.  Best example is TD bank, they have US/Canada mortgagers.

Lastly is the private money.  I have worked with a few of them.  The terms are not as good, but given you may not have a better alternative.  If you PM me, I will send you the ones I have used.

Originally posted by @Daniel Mulberry :

.

 Thanks for this.  I'll look through that link and try to get a better handle on options.  I was committed to a certain strategy for so long that I haven't though through other options so thoroughly.

The non-resident issue is one that shouldn't have surprised me.  We had a similar issue with a brokerage a couple of years ago and had to close some accounts with them.  I can't say that I know the details, but I take it that there are money-laundering concerns, our brokerage issue came around the same time that FACTA/F-Bar started being a bigger issue for our international banking as well.  I guess you must have similar issues in Hong Kong.

@Steven Dreyer

By the way, I thought conventional loans do not need to be owner occupied: https://thelendersnetwork.com/conventional-loan-requirements/. I was under the impression you just need a credit score, and therefore a SSN, but then I might be mistaken. You better check with several banks.

FATCA might be advertised it as fight against money laundering, but this looks like a fiscal repression tool imposed on US persons. One of the fallout of the crisis is that suddenly every foreign bank and brokerage in the world is requested to do some work for the IRS no matter their jurisdiction. The outcome is that many banks and brokers pulled out from many locations because of the cost of compliance.