Financing US Real Estate as a Foreigner: Loans and Paperwork

When you finance a property at home, you hand over your pay slips and a credit report and get an offer. In the USA, that route only partly works for buyers from abroad. The loans American families get are tied to lawful residence in the USA, and you don't have an American credit history yet. There are still ways in. Here you'll find which loan types are open to foreigners, which documents you need, which deadlines the law sets for the lender and what financing costs on top of the interest.

1Why the American mortgage isn't built for you

The American mortgage market rests on a foundation that buyers from Europe rarely bring with them: an American credit history and a life in the USA. Many home loans aren't kept by the bank that makes them; it sells them on to buyers such as Fannie Mae, and their rules decide who gets a standard loan.

For you, those rules are clear. Under its Selling Guide, Fannie Mae buys loans to non-US citizens who live in the USA lawfully, permanently or temporarily, on the same terms as loans to citizens, and the lender must confirm that the borrower is in the country lawfully. If you live in Oslo, Stockholm or Amsterdam and buy a vacation home in Florida, you don't qualify. For government-insured FHA loans, the housing department HUD has removed the non-permanent resident category altogether, binding for cases with case numbers assigned from May 25, 2025 (Mortgagee Letter 2025-09).

This isn't the whim of individual banks. The law against discrimination in lending, implemented in Regulation B, expressly allows a lender to consider immigration status and permanent residency, along with any information it needs to assess its rights to repayment (12 CFR § 1002.6(b)(7)). A borrower who lives in Europe and whose assets are there is harder for a lender in Texas to reach than one who lives around the corner. That shows in the terms.

A word on your credit rating at home: American credit bureaus don't know your home country's credit agencies. How to build a credit history in the USA, and the ways to bring an existing one with you, are covered in Bank account and credit in the USA and Transferring your credit score to the USA.

2The loan types open to foreigners

What's left are loans outside the standard track. The law doesn't give them fixed names, but four groups stand out clearly.

2.1Foreign national loans and portfolio loans

Some lenders keep loans on their own books instead of selling them. Then their own rules apply, and some offer programs for buyers who don't live in the USA, often called foreign national loans. Typically they ask for more equity than a standard loan, review foreign income and asset documents and charge a premium on the interest rate. No law sets how much; it varies from lender to lender and from property to property.

2.2Loans for rental properties

For a house you plan to rent out, there are loans based less on your income than on the rent the property brings in; the market often calls them DSCR loans. Legally important: a loan made mainly for business purposes, or a loan to a company rather than an individual, is not covered by the consumer credit rules of the Truth in Lending Act (12 CFR § 1026.3(a)). The deadlines for cost disclosures described below then don't apply. That makes these loans more flexible and means you need to read the terms more carefully yourself.

2.3Seller financing

The seller defers part of the purchase price and secures it with a promissory note and a lien on the property. Whether they agree is up for negotiation. How these contracts are structured and what matters is covered in our article Buying US real estate without bank financing.

2.4Borrowing at home

Many European buyers don't finance in America at all but at home, for example with a loan secured by a property or an investment portfolio in Europe. The American purchase is then a cash purchase, with all the advantages that brings at closing. The price is currency risk: you owe in your home currency, own a house in dollars, and the rent comes in dollars.

Which of these groups suits you depends less on the interest rate than on three questions: Will you live in the property or rent it out? Are you buying alone or through a company? And how much equity can you put in without weakening your finances at home? Settle that before you talk to lenders, and get the approval in writing before you make an offer. An offer with a financing contingency is worth less to a seller than one without, and if you bid without a contingency and without approval, you put your earnest money at risk.

3The documents: what the lender wants to see

Every bank in the USA must identify its customers. For someone who isn't a US person, the rule calls for a taxpayer ID number, a passport number with the issuing country, an alien identification number or the number of another government-issued photo ID (31 CFR § 1020.220). So an ITIN isn't strictly required for identification. A lender can still ask for one, and you'll need it for renting out the property anyway.

Beyond that, a lender wants to know whether you can repay and where your equity comes from. Expect to provide:

• your passport and proof of your home address in Europe,
• proof of income, tax assessments or your company's annual accounts, translated into English,
• bank statements for recent months showing your equity,
• proof of where the money comes from, such as a property sale, an inheritance or savings,
• a report from your credit agency at home, if the lender accepts it,
• for rental properties, a rent estimate or existing leases,
• when buying through a company, the formation documents, the EIN and proof of who signs for it.

Allow time for translations and certifications. The deadlines in the purchase contract run from the effective date, not from the day your documents are complete. How the purchase contract handles financing is explained in Buying real estate in the USA: the process.

4The ITIN: your number in the American system

The ITIN is the IRS tax number for people who need a number for tax purposes but can't get a Social Security number. It serves tax purposes only: according to the IRS, it gives no right to live or work in the USA and no entitlement to social benefits.

For a property buyer from Europe, it is still a key. Without it, you can neither file Form 1040-NR for your rental nor give your property manager Form W-8ECI, which ends the 30 percent withholding on gross rent. How it helps you build your own credit history is covered in Credit card with an ITIN. The usual route is Form W-7 filed together with your first tax return; how that works is explained in Applying for an ITIN.

5When a company takes out the loan

If you buy through an LLC or a corporation, the company is the borrower. For you as the owner, that cuts both ways. Loans to companies are not consumer loans, so the protections of the Truth in Lending Act do not apply (12 CFR § 1026.3(a)(2)). At the same time, the lender looks not only at the company but also at who stands behind it, and a company with no history gives the lender little security. So before you buy, ask whether the lender lends to companies, on what terms, and which personal guarantees or statements it will require from you.

Switching later is the expensive route. If you transfer a financed home to your LLC after the purchase, the lender can call the loan under a due-on-sale clause. The federal exceptions in 12 U.S.C. § 1701j-3(d) cover transfers to a spouse, to children or into a trust in which you remain a beneficiary, for example, but not transfers to a company. Which structure fits your plans is explained in Buying US property through an LLC.

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6The deadlines the law sets for lenders

If you take out a consumer loan secured by property as a private individual, two forms protect you. No later than the third business day after your application, the lender must send you the Loan Estimate, showing the expected interest rate, monthly payment and costs (12 CFR § 1026.19(e)(1)(iii)). And the Closing Disclosure with the final figures must reach you no later than three business days before closing (§ 1026.19(f)). Compare the two: the gaps between estimate and final statement are where costs disappear or suddenly appear.

As explained above, these deadlines do not apply to loans made primarily for business purposes or to loans to companies. If you are financing a rental property, don't rely on them: ask for the cost breakdown explicitly.

7What financing costs beyond the interest

Interest is only part of the bill. The lender requires a loan policy, title insurance in its favor that runs until the loan is paid off; in Texas its price is based on the loan amount and is the same at every title company. If the home sits in an area FEMA has designated as a special flood hazard area, flood insurance is mandatory for the life of the loan, covering at least the outstanding balance or the maximum coverage under the federal program (42 U.S.C. § 4012a(b)).

Florida also levies its own taxes on the loan. Promissory notes are taxed at 35 cents per 100 dollars (§ 201.08), and loans secured by Florida real estate carry an additional one-time tax of 2 mills per dollar of the amount (§ 199,133). For a vacation rental in Florida, factor these costs in from day one; what else to expect is covered in Buying and renting out a home in Florida.

8Interest and taxes

For a rental property, mortgage interest is a rental expense. The IRS lists it among the usual deductions in Publication 527, and you deduct it on Schedule E if you have elected net taxation under § 871(d). Without that election, you pay 30 percent on gross rent and your interest makes no difference.

For a home you use yourself, it's a different story. The list of itemized deductions for nonresidents in Publication 519 does not include mortgage interest. How rent, depreciation and tax treaties fit together is explained in Taxes on US property. What happens to the home and the loan when the owner dies is covered in US estate tax for foreign owners.

In short

• The standard loans for American families require lawful residence in the US. Fannie Mae only buys loans to non-US citizens who live there, and FHA excludes non-permanent residents.
• For buyers living in Europe, the options are foreign national loans and portfolio loans, loans for rental properties, seller financing and a loan from home.
• Expect to provide your passport, tax ID, translated proof of income and assets, and evidence of where your down payment comes from. An ITIN opens many doors along the way.
• For consumer loans, the law sets deadlines for the Loan Estimate and Closing Disclosure; they do not apply to business loans or loans to companies.
• Beyond interest, you pay for flood insurance, the lender's title policy and, in Florida, separate taxes on the loan.

How we help you

• US blocker for real estateBuying US property through a US C Corporation with a UK holding company.
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• US Bank Account OpeningYour own access to the American financial system, even without an SSN.
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