How can international investors get funding in the US?

Question

Our family resides in Guatemala and we are interested in investing in real estate in the US. I have the advantage of being a US citizen, but I´m unemployed; my husband, who provides the income for the family and could properly apply for a loan, is guatemalan. Any suggestions as to how we may apply for funding, in order to invest in real estate in the US? Which companies do you recommend which offer this service to international investors? Thanks for your help

Mitch Messer · Answer

@Geraldine Veiman You should also explore scenarios where the seller of the property is prepared to finance the sale. Structured properly, you can avoid the sky-high interest rates and unreasonable down payment requirements of banks and traditional lenders by finding yourself a willing seller.

I work with international investors who have used owner financing to acquire cash flow portfolios here in the U.S. I'd be happy to put you in touch. PM me here if you are interested.

Joe Abughazaleh · Answer

I recently received a flyer for a mortgage broker that does business in CA and NV and these are the terms its stated for Foreign National Program:

-Rates starting at 7.125%

-2nd home & Non owner occupied

-No Income Verification

-No Reserves

-70% LTV

-Passport only to qualify

-International credit report or letter of good standing with current Financial Institution

- Brokers can charge up to 6 points ( Steep if you ask me)

Send me a message if you would like me to pass along the companies info.

Daniel Molina · Answer

@Geraldine Veiman

As many already mentioned, your best bet will be to go to specialized lenders or non-bank lender. Depending on the asset/unit count you can either get programs that will mimic conventional loans  (30yr, fully amortizing, fixed rate) or commercial programs (5-10 year balloon with 30 year amort). Again, be prepared to have lending limited to 60-70% LTC/LTV as a foreign national investor.

Ryan O'Mara · Answer

@Geraldine Veiman - There are stated lender options for this.  As long as you're FICO is decent and you have the liquidity then the lender will loan off the dscr of the property.  You'll need to have a good property management plan since you live out of the country.  But definitely doable.

George Despotopoulos · Answer

There are non-bank lenders that cater to foreign investors. Like others have mentioned, be prepared to put a little more down (30%-35% is not uncommon) and have a bit more in reserves to show (3-6 months liquid reserves). Some may even require a hold-back of a certain amount, it varies by lender. My point being that there are definitely options for foreign investors.

Omar Khan · Answer

@Geraldine Veiman There is limited conventional financing available to non-US residents/citizens when buying US real estate. The few mortgage brokers you cater to this market will either offer very high interest  rates (relative to the market), lower amortization periods, higher down payments (25% is standard for an investment property for US residents/citizens - so you'll have to pay significantly above that) and shorter balloon payments (similar to commercial loans).

You have to look at it from a lender's perspective. They have little to no recourse in case your deal doesn't work out. They can't ding your credit history or take you to court. Hence, they have to be compensated for this risk.

This doesn't mean lending doesn't happen. All it means is that the average advice you hear on BP does not apply to you.

If you have a medium-sized account ($500-750K liquid assets) with your bank, they can asisst you in getting financing through their US subsidiaries. Global banks like HSBC, Citi, Standard Chartered, BNP Paribas, Bank of America, RBC and some other folks do it.

Melvin List · Answer

@Geraldine Veiman I would reach out to a broker licensed in the state you would like to invest in.  There are plenty of programs out there.  I would count on putting down 25 to 30%