6 Easy Steps to Get TN Visa Mortgage – [Guide]

TN Visa holders now have a great opportunity to own their dream property faster and more conveniently. Thinking how? That’s what we are about to disclose in the blog now. So, if you are a Canadian or a Mexican citizen looking for mortgage options to purchase an investment property or primary residence, scroll down and grasp all the details you need to get a TN Visa mortgage.

TN Visa Overview

TN Visa stands for Trade NAFTA (North American Free Trade Agreement) visa and is a non-immigrant visa given to citizens of Canada or Mexico who want to live and work in the United States. This type of visa is ideal for professionals in fields such as accounting, engineering, law, medicine, science, and teaching. TN-1 visa is for Canadian Citizens, and TN-2 visa refers to Mexican citizens.

Can You Apply for a Mortgage on TN Visa?

Yes, TN visa holders like yourself can buy a house or investment property in the US the same way as American citizens. However, owing to your TN status, you would need extra documents like a valid passport and TN visa status, along with an approved mortgage from US-based lenders, who can help you finance the purchase. 

HomeAbroad specializes in providing US mortgages for foreign nationals, including expats, newcomers, and non-resident investors buying primary residences, second homes, or investment property. Get a quote today!

If You are on a TN Visa, Should You Buy a Home in the US?

Buying a home in the US is a great way to invest your money. It not only offers a steady appreciation of the value of your property but also provides you with great returns and is one of the best places to live in. On top of that, TN visa holders can enjoy several benefits, such as:

Reason 1: Totalization Agreement

Canadian citizens can benefit from Totalization Agreement and seek an exception from social security and Medicare taxes.

Reason 2: More Mortgage Options

The USA caters to the mortgage needs of both Immigrants and non-immigrants. Those who have US credit history and those who lack a US credit history both set of borrowers can choose from various loan options and reap the benefits of owning properties in the USA. (Details given below)

Reason 3: Proximity to the Home Country

Close proximity to friends and family. Canada and Mexico are well connected to the US by various means of transport. This is an added advantage of buying real estate in the US on a TN visa Mortgage, you get to stay close to your home country.

Reason 4: Property Appreciation Rate

Profitable rental returns and property appreciation are two very lucrative benefits of buying property in the USA. According to Millionacres.com, the current national average appreciation rate is 2% monthly and 14.5% year over year.

Reason 5: Affordable Housing

Housing is affordable in the US in comparison to Canada. The average housing price in Canada is 40% more expensive than in the USA.

Reason 6: Ownership Guaranty

If TN visa holders have to return to their home country, their ownership of the US property remains valid. Also, they can hire a property management company to conduct the property on their behalf.

Reason 7: Diversification of Assets

USA real estate is promising in terms of diversification of assets. By diversifying real estate across different commercial and residential properties, you can take advantage of the real estate market. It will help you edge over slowdowns and improve your overall investment portfolio.

Reason 8: Tax Benefits

US real estate offers highly valuable tax benefits like real estate tax deduction, pass-through deduction, self-employment without FICA tax incentive programs (1031 exchange), and an advantage from capital gains.

1. Real Estate Tax Deduction:

One of the greatest financial perks of investing in real estate is the tax deductions you can take. You get to deduct expenditures tied to the operation of property directly,

• Property taxes
• Property management fees
• Cost to maintain and repair the building
• Property insurance
• Mortgage interest

2. Pass-Through Deduction:

A pass-through deduction allows the investor to deduct up to 20% of qualified business income (QBI) on investors’ personal taxes. So, if you own a rental property as a sole proprietor or through a partnership, the rental income is considered QBI by real estate tax law.

3. Depreciation of Cost: 

As a real estate investor owning income-producing rental investment property, you can deduct depreciation from wear and tear as an expense on your taxes. That implies you’ll lower your taxable income and reduce tax liability.

You can take advantage of depreciation deduction for the entire expected life of your real estate property (currently, as set by the IRS, it is 27.5 years for residential properties and 39 years for commercial properties).

4. Incentive Program (1031 exchange):

1031 exchanges encourage investors to reinvest the profit they gain through their previous real estate investments. It is the government’s way of encouraging investors to reinvest the profit into real estate. As long as the new property you buy is of equal or greater value than the one you sell, the program lets you swap them for tax purposes.

The next section will help you gauge the phenomenal interest of Canadian and Mexican citizens in US real estate. It highlights the fact that buying property in the US is a highly rewarding investment.

US Real Estate Market and TN Visa Mortgage

As the US housing market continues to flourish, TN visa holders are vying for their share. They are making the most of various mortgage loan options to gain leverage from the growing US real estate. HomeAbroad can help you access competitive mortgage rates and terms that fit your needs by connecting you with highly experienced and reliable mortgage lenders for free.

Canadian Buyers: Last year, homes purchased by Canadians in America amounted to 11,300 units, a steep rise from 8,800 in 2021. The average price of US homes bought by Canadians in 2022 was around $485,000.

Mexican Buyers: In 2022, Mexican real estate buyers amounted to 8% of total foreign buyers, making them the second largest foreign buyers.

Top International Buyers in the USA

According to the NAR report 2022, Canadian and Mexican buyers topped the list of foreign buyers in America.

Canada remained the top country among foreign buyers from April 2021-March 2022, with 11% of the total number of foreign buyers’ home purchases, while Mexico stood second amongst the largest origin of foreign buyers, with an 8% share. Also, Canada and Mexico have been the top two origins of countries to foreign buyer purchases.

Overview: Canadian Buyers in US Real Estate

Year	Percent Share of Canadians to Foreign Buyer Purchases	Dollar Volume of Existing Homes Purchased By Canadians in Billion Dollars	Existing Homes Purchased by Canadians	Average Purchase Price	Median Purchase Price
2009	18%	$8.5	28,300	$298,780	$225,000
2010	23%	$17.1	69,100	$247,300	$200,000
2011	23%	$13.1	48,500	$269,100	$177,300
2012	24%	$15.9	49,500	$321,700	$171,900
2013	23%	$11.8	43,900	$269,100	$183,000
2014	19%	$13.8	43,700	$314,700	$212,500
2015	14%	$11.2	33,800	$380,300	$196,300
2016	12%	$8.9	27,400	$332,100	$222,300
2017	12%	$19.0	33,800	$560,800	$288,600
2018	10%	$10.5	27,400	$383,900	$292,000
2019	11%	$8.0	19,900	$400,000	$268,200
2020	12%	$9.5	18,300	$517,200	$292,300
2021	8%	$4.2	8,800	$473,600	$400,900
2022	11%	$5.5	11,300	$485,000	$416,100

Overview: Mexican Buyers in US Real Estate

Year	Percent Share of Mexicans to Foreign Buyer Purchases	Dollar Volume of Existing Homes Purchased By Mexicans in Billion Dollars	Existing Homes Purchased by Mexicans	Average Purchase Price	Median Purchase Price
2009	10%	$3.8	15,700	$240,341	$125,000
2010	10%	$6.5	30,100	$214,700	$134,400
2011	7%	$4.2	14,800	$283,000	$168,800
2012	8%	$6.5	16,500	$396,200	$200,000
2013	8%	$3.6	15,800	$225,500	$156,300
2014	9%	$4.5	20,000	$224,100	$141,100
2015	9%	$4.9	17,900	$274,800	$171,200
2016	8%	$4.8	17,900	$266,200	$176,500
2017	10%	$9.3	28,500	$326,800	$180,900
2018	8%	$4.2	20,200	$208,800	$189,100
2019	9%	$3.7	15,900	$233,700	$170,100
2020	9%	$5.8	14,400	$403,500	$249,900
2021	7%	$2.9	7,100	$407,500	$341,400
2022	8%	$2.9	7,800	$365,700	$315,100

Requirements to Get a TN Visa Mortgage Loan

TN Visa mortgage is one of the best loan options for the citizens of Canada and Mexico who want to expand their real estate portfolio in the USA. Loan lenders often prefer to cross-check the credentials of the applicant before lending a mortgage. Here is the list of requirements that you as a borrower must keep in place while preparing to approach a lender.

1. Work History: You should have worked for at least 2 years in the US to qualify for applying for a mortgage loan. The lender would require your employment history. If you have been working for the same company in another country, it would also help you get approved.

2. Bank Account: You should be able to show the lender that you have a valid US bank account with enough funds to cover your down payment and closing costs. If a US bank is partnered with a bank in your home country, the mortgage approval process will be a lot easier, and this will be a lot less complicated.

Must Read: How to Open US Bank Accounts for Non-Residents and Non-Citizens

3. Passport: Mortgage lenders will need your passport for identification and visa verification purposes and for approving your loan application.

4. Individual Tax Identification Number:  To get an ITIN (Individual Tax Identification Number) you must file a federal tax return and provide evidence of your foreign identification. Mortgage lenders would need it to determine your repayment capacity.

5. Proof of Assets: Your assets may not necessarily be in the US. Assets give lenders an idea of whether you can cover the down payment and closing costs. Also, you need to prove that foreign funds belong to you and can be transferred into a US bank account when necessary.

6. Permanent Resident Alien: You’ll need a green card and social security number. The process of applying for a mortgage will be similar to that of U.S. nationals. 

7. Non-Permanent Resident Alien: You need not have a green card but must have a social security number. You can use a work visa or a special employer-sponsored visa to process a mortgage application. It’s also helpful if you can guarantee that you’ll be able to stay in the country for at least three years.

Home loans from Fannie Mae, Freddie Mac, or the Federal Housing Administration may have additional requirements for non-US residents, which can be checked out at the USCIS website.

8. Proof of Immigrant Intent/Non-Immigrant Intent: Lenders need to be assured that the borrower does not intend to move back to their home country soon. To qualify for a mortgage, borrowers must show evidence of immigrant intent, such as submitting rental leases, utility bills, or a pending green card application.

So basically, mortgage options for TN visa holders are not a distant dream. You need to be sure that they meet all the requirements. Getting a TN Visa Mortgage will be smooth once you have the documents ready.

Types of TN Visa Mortgage

There are different types of TN Visa mortgages available. Some lenders specialize in working with foreign nationals and extend loans to those living permanently or temporarily in the US, while some work with only permanent residents. The following are the most popular loan options based on immigration status.

Immigrant Mortgage Options:

1. Conventional Mortgage

A conventional mortgage is the most common type of loan, and it is ideal for those with a good credit score, stable employment history, and enough assets to cover down payment and closing costs.

2. FHA Mortgage

An FHA (Federal Housing Administration) is insured by the government and offers more lenient terms than a conventional loan. However, this also requires borrowers to submit tax stubs, proof of income, etc., which is a long and tedious process.

Non-Immigrant Mortgage Options:

1. DSCR Loan

DSCR, or Debt Service Coverage Ratio, is a type of loan based on the premises of the positive cash flow generated by the property. While approving the loan, the lender primarily considers two aspects,

1. Property’s value

2. The income it can create.

HomeAbroad has a vast network of DSCR money lenders who can help you purchase the best-suited property even if you lack a US credit history. Our lenders come with immense experience working with TN Visa holders, making it easier to strike a deal with them. Additionally, you can also benefit from their insights and years of experience.

To know more, read: DSCR Loans Guide: How to Qualify for DSCR Loan?

2. Foreign National Loans

The most popular type of mortgage loan among non-immigrants is the foreign national loan. These are loans are specifically designed for those who move to the US on a temporary visa or simply wish to buy a property in the US. To qualify, the borrower must provide proof of assets and other documents like a passport and visa. The best part of this loan is that you can forgo the long wait of building a US credit history before purchasing a property. By availing of the benefits of this loan, you can start reaping the profits from your property at the earliest.

Read: Guide to Foreign National Mortgage Loans with No US Credit

TN visa holders should consider all their options regarding securing a mortgage loan.

Step-By-Step Procedure to Apply for TN Visa Mortgage

1. Gather Documents:

• The first step is gathering all the necessary paperwork to apply for a TN visa mortgage loan.
• This includes a passport, employment verification letter, US bank statements, foreign assets verification document, individual tax identification number (ITIN), and proof of permanent residence status or work permit.

2. Find the Right Property:

• The next step is to research the right property.
• Make sure you have clarity on the type of property you wish to purchase and the preferable location.
• Researching in advance can help you save time and money while applying for a mortgage loan. You may either research online, take references from friends and family, or reach out to HomeAbroad and get in touch with expert international real estate agents(CIPS Agents).

3. Find a Mortgage Lender:

• Look for lenders who are experienced with TN visa mortgages.
• Having a lender who understands the process can help you expedite the process and save time, money, and effort.
• Comparing rates from different lenders is essential to ensure you get the best deal possible.
• HomeAbroad specializes in providing US mortgages for foreign nationals, including expats, newcomers, and non-resident investors buying primary residences, second homes, or investment property. Get a quote today!

4. Get Pre-Approved:

• Before applying for a loan, get pre-approved with the lender so they can tell you how much mortgage you are eligible for.
• This will narrow your search of properties to only those within your budget. This will help make the actual mortgage process go smoothly and quickly.

5. Close the Loan Paperwork:

• Once your loan has been approved, there will be some paperwork that needs to be completed for the loan to be finalized.
• This will include signing the closing documents and other required paperwork.

6. Sign the Mortgage Agreement:

• After completing all the paperwork, you will sign your mortgage agreement.
• This is when you will become legally responsible for repaying the loan.

Now that you’ve gone through the step-by-step procedure to apply for a TN visa mortgage, it’s time to prepare for closing and moving in! There are many things to consider when selecting a property and ensuring that your loan is properly secured. Refer to the next section to learn the procedure for buying a home in the USA.

Procedure for TN Visa Holder Buying Home

The TN visa provides an opportunity for foreign nationals to enter the US for a temporary period of time. This makes buying a home in the USA on a TN visa more feasible than ever. While it may seem challenging, purchasing property in the US can be made much simpler with the right steps and preparation.

1. Research Your Options

2. Work With a Real Estate Agent

3. Calculate Your Budget and understand cross-border tax implications.

4. Get Pre-Approved

5. Submit Your Documentation

6. Home Inspection

7. Underwriting

8. Closing

For further details, refer to,

1. The ultimate guide for a Canadian buying house in USA
2. The ultimate guide for a Mexican buying house in USA

Following these steps will help you successfully purchase a home in the USA on a TN visa. Just remember to stay organized and consult with experts if you have any questions or concerns.

Conclusion

TN visa holders should consider all their options regarding securing a mortgage loan. TN visa mortgages can be simpler and more secure with the right documents and research. Remember to review your mortgage rates and terms before signing any agreements.

Frequently Asked Questions