How to Buy a House in the U.S. Without a Green Card?

Michele Lawrie, CREO - HomeAbroad  by Michele Lawrie
11 min read
How to Buy a House in the U.S. Without a Green Card?

Can I buy a home in the United States without having a green card?

The answer is yes – buying a house in the USA without a green card is possible. With careful planning and research, foreigners can purchase property in the USA.

If you’re an immigrant, foreigner, or without permanent residency and want to buy a house in the USA, you may be wondering about the process.

Buying a home in the United States as a foreign national without having a green card might seem complicated, yet with proper guidance, it’s easy! Here is the process of buying a house without a green card.

How Can a Foreign National or Non-Resident Buy a Home in the USA Without a Green Card?

It is possible to purchase a property as a foreign national or non-resident without a green card. Although, there are a few steps that you need to be aware of before going through the entire process.

  • You will likely need to settle a larger down payment than usual, as lenders may perceive you as a higher risk.
  • You may also be subject to stricter credit requirements.
  • Furthermore, if you are not a citizen or resident of the United States, obtaining mortgage financing may be more complex than a green card holder.

However, some lenders specialize in providing mortgages to non-residents.

Steps to Buy Property in the US without a Green Card

Step 1: Decide what and where you wish to buy the house in the U.S.

When looking to buy a house in the USA, resident foreign nationals should think about things such as commute, neighborhood type, schools (if you have children), and other factors when deciding where to purchase a home. Likewise, non-resident foreign investors should look into the USA’s most acceptable cities and states to reside in (and invest in real estate). Along with property type and location, set a budget to plan your financing options.

Step 2: Find a reputable real estate agent with CIPS designation

Foreign nationals interested in buying property in the United States often face difficulty securing financing and navigating the legal landscape.

A real estate agent with CIPS (Certified International Property Specialist) designation can help overcome these challenges and make f much smoother. In addition, a real estate agent can also provide valuable guidance on rules and regulations on choosing the right property and negotiating the best price.

Find the best real estate agent with international expertise

Connect with a local US real estate agent(s) with CIPS designation

Step 3: Start your home search process with a Real Estate agent. 

If you don’t know what kind of property you’re searching for, it’s time to let your real estate agent know. If you’ve found a home and wish to purchase it, your real estate agent will assist with closing procedures. If you are not in the US, your CIPS real estate agent can share properties online and can even arrange virtual tours to help you make the right decision.

Step 4: Make an offer and finalize your dream home.

Once you’ve decided on a house you’d like to buy; your real estate agent will provide data on comparable properties sold in the region. Your real estate agent will recommend what offers you should submit to the seller with this information. Because property list prices are usually negotiable, you should trust in your professional’s experience in negotiating.

Step 5: Obtain a U.S. Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) from the IRS.

Foreign nationals who want to purchase property in the United States will need an SSN or ITIN from the IRS. This number is used for tax purposes and will be required when applying for a mortgage.

Step 6: Apply for a mortgage from a lender that offers to finance foreign nationals and non-residents.

There are lenders specializing in providing financing to foreign nationals and non-residents. For example, a mortgage from a foreign national lender can provide you with the funds you need to make your purchase. In addition, they can make the process easier and more affordable.

In most cases, foreigners and non-residents will need additional documentation, such as proof of income and asset ownership.

Step 7: Understand taxation as a non-resident.

Open a U.S. bank account and deposit the necessary funds for your down payment and other expenses related to buying a property.

To understand taxation better as a non-resident, it is essential to know that the U.S. government has implemented some rules. To prevent non-resident investors in U.S. real estate from incurring additional taxes, unlike other countries that may impose additional taxes on you for purchasing real estate as a non-resident foreign buyer.

Step 8: Conduct a home inspection  

Although you don’t need to inspect before purchasing a house, it’s best if you hire one to ensure that everything is covered correctly. The inspector will check for any building flaws or damages and make sure the home is structurally sound, and all systems are operational.

Step 9: Sign a purchase contract with the seller and complete a title report.

You will enter into a contract of sale with the seller after you make an offer. The document that binds you to the transaction is the contract of sale. The price and any additional conditions negotiated by your realtor will be included in the agreement.

The next stage will be to have a Title Report completed once you’ve signed the contract. Again, this is something your real estate agent should be able to help you with. A Title Report in the United States will show previous owners of the property and any existing liens against it.

Step 10: Take ownership of your new house in the USA.

There will be many documents to sign on the day you take possession. The seller first signs a deed transferring ownership to you. The paper is notarized and recorded in the local government office for your protection. On the day of the closing, or when you take ownership, the seller will give you the keys so that you can move in at any.

Buying House in the US with Different Visa and Immigration Status

Buying a House with Work Visa

If you’re looking to buy a home in the United States with a work visa like H-1B, H-1B1, H-2A, and H-2B, real estate agents or lenders must verify your right to reside in the U.S. will last for at least three more years. However, the exact length of residency can be hard to pin down, so most lenders will accept a valid visa as sufficient verification at that moment.

However, if you have less than a year remaining on your current visa, the lender may request confirmation from your employer that you will continue to work for them.

The agent will then determine whether or not it believes you’ll be in the United States for at least another three years.

Temporary Non-Resident Alien

Yes, a non-resident can buy property in the United States without a green card. There are no restrictions on property ownership for non-residents.

However, aliens may be subject to specific tax laws and regulations related to their ownership of U.S. property.

Some restrictions apply to foreigners buying property in the USA.

Aliens’ tax

The main restriction for foreigners buying property in the USA is the “aliens’ tax.” This tax is imposed on all foreigners who purchase property in the USA. The aliens’ tax is generally equal to 10% of the property’s purchase price.

Foreign investment in real property tax

Another restriction that may apply to foreigners buying property in the USA is the “foreign investment in real property tax.” This tax is imposed on all foreigners who purchase property in the USA for investment purposes.

The foreign investment in real property tax is generally equal to 15% of the property’s purchase price.

However, there are several exceptions to these restrictions. For example, foreigners who classify as “temporary non-resident aliens” may be exempt from the aliens’ tax. In addition, foreigners who purchase property in the USA for personal use may also be exempt from the foreign investment in real property tax.

Deferred Action for Childhood Arrivals (DACA)

DACA recipients can often buy a home in the United States as long as they intend to use it as their primary residence and have a credit score of 620 or higher.

Financing options for DACA recipients are often limited.

Although, one option that is sometimes available is an FHA loan, which the federal government backs.

Refugees and Asylees

After a refugee or asylee has resided in the United States for at least one year, they may apply for a green card.

After receiving a green card, they are eligible to apply for a mortgage. To apply for a green card, refugees and asylees will need to submit a Form I-94A, an official document that proves their residency or employment status in the United States. After receiving a green card, they are eligible to apply for a mortgage.

Applying for a mortgage as an asylee or a refugee to buy a house

The steps involved in applying for a mortgage may vary depending on the lender. Still, refugees and asylees will generally need to provide proof of income, employment history, and credit score. If they can meet these requirements, they should be able to obtain a mortgage and begin the process of buying a home.

Purchase Property in the United States Through a Real Estate Trust

Another way to buy property in the US without a green card. This type of trust is designed for foreign investors and can provide the same level of protection as a green card. Also known as a Non-Resident Aliens Real Estate Trust (NRAT).

One of the main benefits of an NRAT is that it can provide the same level of protection as a green card. This means that the property will be protected from seizure by the investor’s home country, and it can also help shield the property from U.S. estate taxes.

In addition, an NRAT can offer some flexibility in how the property is managed, making it an attractive option for those looking to invest in U.S. real estate.

Getting US Mortgage to Buy Home Without a Green Card

Getting a loan for your home US home is easy if you know the process. Here are the steps:

Step 1: Establish a budget

The most important thing to consider when getting home financing in the United States as a foreign national is your maximum monthly payment rather than the property value. This is what you will be paying for each month.

Step 2: Obtain pre-approval for a foreign national mortgage

Obtaining a pre-approval for a foreign national mortgage loan might provide you with peace of mind in knowing how much money your financier will lend to you before beginning your hunt.

Step 3: Prepare your paperwork for a foreign national home loan

You will generally need documents that verify three things: Identity verification and income statements that demonstrate an ability to make payments on a new home. Also, there needs to be evidence of assets such as stocks or savings accounts. 

Guide to Foreign National Mortgage Loans with No US Credit

Step 4: Make an offer on your house and look for it on the market

Start your house hunting with the help of a real estate agent. Preferably a CIPS designated agent. After completing all of the necessary paperwork, it’s time to finalize your foreign national mortgage loan application.

Step 5: Lock in your interest rate on a mortgage loan

Locking your mortgage interest rate will ensure that your interest rate remains the same until the loan’s closing.

Step 6: Mortgage Loan Underwriting and Processing

You’ll collaborate with a loan processor responsible for preparing your mortgage loan information and application for submission to the underwriter.

Step 7: Property appraisal

The property appraisal is the process of determining a property’s value. Many methods are used to value real estate, including comparisons with similar houses recently sold nearby.

Step 8: Closing

After underwriting, bring your photo ID, a copy of your Closing Disclosure, and any other final paperwork, as well as all required payments to complete the closing procedure. It’s now time to take possession of this fantastic home.

Learn More: Mortgage Closing Process: All You Need to Know About Your Closing and Closing Disclosure

Mortgage Options for Foreign Nationals Buying a House Without a Green Card

1. Federal Housing Loan (FHL)

Source: FHA

If you’re not a U.S. citizen, you may still be eligible for specific federal housing loan programs.

The Federal Housing Administration (FHA) is a government agency that provides mortgage insurance on loans made by FHA-approved lenders.

FHA loans are popular with first-time homebuyers as they typically require a lower down payment and credit score than conventional mortgages. Yet, they are not only limited to first-time buyers – anyone who meets the eligibility requirements can apply for an FHA loan.

While there are several federal housing loan programs available, non-residents typically use one of two:

Fannie Mae: Fannie Mae is a government-sponsored company that helps lenders buy their loans. This allows the lenders to have more money to loan out, which helps people buy homes.

Freddie Mac: Freddie Mac is a similar company that helps people get low-cost loans to buy homes.

If you live outside the United States because of work or active military service, Fannie Mae and Freddie Mac will enable you to buy a second home or investment property.

Both Fannie Mae and Freddie Mac have programs specifically for non-residents.

2. Foreign National Mortgages

Most traditional lenders prefer to make loans to U.S. people. Buying a house would be easier if someone had a green card or visa to get to the U.S. It is generally safer than mortgage lending to people. Imagine if an American homeowner will default on their mortgage; yes. Then the loan is subject to federal courts. The cost of hiring an international attorney would be extreme.

Mortgage insurance protects lenders against losses if borrowers default on their mortgages, and it allows borrowers to purchase homes with less-than-optimal credit scores or small down payments.

3. Conforming and Non-Conforming Loans

Conforming and Non Conforming loans
Source: Rocket Mortgage

Conforming loans

A conforming loan is a mortgage loan that conforms to specific guidelines set forth by government-sponsored enterprises Fannie Mae and Freddie Mac.

Conforming loans usually have lower interest rates

Remember that the conforming loan limit is based on the amount of money borrowed, not the property value.

It must be less than $647,200 for a single-family home as of 2022

It may require a minimum down payment of 20%

Non-conforming loans

Non-conforming loans have higher interest rates because they are easily sold on the secondary mortgage market. You might want to use a mortgage to buy a primary residence, a second home, or an investment property.

Non-conforming loans can be larger.

A non-conforming loan may require more than 20% of the downpayment. The credit score requirements may also be higher for a non-conforming loan.

These are some options you have. If you are confused with the available options or lenders, then HomeAbroad can help you choose the best mortgage option and lender for you.

US Mortgages with no US credit history

Best US Mortgages for Non-Green Card Holders

Get pre-qualified for a US Mortgage as a foreign national buyer without a US credit history.

Fair Housing Act (FHA)

The Fair Housing Act (FHA) is a federal law that prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status, or disability. The FHA applies to all types of housing, including public and private housing such as apartments, single-family homes, and townhomes. This act was passed in 1968.

Discrimination in housing can take many forms, including:
  • Refusing to sell or rent a home to someone based on their race, color, religion, national origin, sex, familial status, or disability
  • Setting different terms and conditions makes housing unavailable for the sale or rental of a home based on ethical characteristics.
  • Falsely telling someone that a home is not available for sale or rent when it is

What to do if you face housing discrimination?

It's important to know your rights and what to do if you face housing discrimination.

File a complaint

The Department of Housing and Urban Development (HUD) may file a lawsuit under both the Fair Housing Act and the Equal Credit Opportunity Act in mortgage loan or home improvement loan discrimination. The Department brings cases where there is evidence of a pattern or practice of prejudice and cases that raise an issue of general public importance.

Some organizations can assist you, such as the National Fair Housing Alliance and the Housing Discrimination Project.

You can also file a private lawsuit against the person or company that discriminated against you. This could include things like written communications, recordings, or witness statements. You’ll need this evidence to file a complaint. 

Conclusion

This article is about buying a home without a green card. Follow all of the instructions carefully, and make sure you have everything you’ll need to go through the purchase and mortgage processes quickly. You may also want to search for an expert real estate professional who can assist you with speeding up the process and making informed judgments.

FAQs

Can I buy a house if I am not a permanent resident?

Yes, you can buy a house if you are not a permanent resident of the United States. There are a few things to keep in mind, however. Such as:

  1. valid visa allows you to stay in the country for an extended period.
  2. steady income and good credit history qualify for a mortgage.
  3. You may be required to put down a larger down payment than a non-permanent resident. But if you have all of these things in place, buying a house as a non-permanent resident is possible!

Does buying a property in the USA give you residency?

Purchasing American homes doesn’t automatically put you on your path to citizenship. But there are other ways to earn permanent residency in the United States if you are a foreign national or an immigrant.

Michele Lawrie, CREO - HomeAbroad
About the author:
Michele Lawrie is the Chief Real Estate Officer at HomeAbroad and has worked as a real estate professional for the past 15 years, helping domestic and foreign national clients navigate the home buying and selling process.
She is passionate about real estate and strives to educate read more...