There are many paths to buying a home in the United States. For those who hold an L1 visa, the process can be a little different than for others. Buying a home in the US is easy, but some specific rules and regulations apply to people who want to purchase property while on a temporary work visa.
If you’re an L1 visa holder, there are a few things you need to know before buying a property or applying for a mortgage. This article will provide a complete roadmap of what you need to do to buy a home and get a mortgage with an L1 visa.
Table of Contents
Can an L1 Visa Holder Buy a House in the US?
YES, you can buy a house in the US on an L1 visa as a foreign national. All US non-citizens, either US residents or non-residents, can purchase and own a home or property in the US. You will go through the same process as a US citizen when applying for a mortgage, except for few steps.
If you plan to buy residential real estate in the US soon, you should start looking into your financing alternatives. Your immigration status, employment status, income, and credit report will likely need to be verified through paperwork when you apply for a mortgage loan to buy a home while on an L1 visa.
HomeAbroad is a one-stop shop that offers information and resources for those looking to buy a home abroad. We can help you find a mortgage loan on an L1 visa that meets your needs and budget by connecting you with appropriate mortgage lenders suitable to your needs.
What Type of Mortgage Can L1 Visa Holders Get in the US?
US non-citizens on work visas such as L1 have different mortgage options depending on their personalized needs, US residency, and credit score.
L1 Mortgages for US Newcomers with No or Thin US Credit History
You don’t have to wait two years or more to get a US-established credit score if you’re a newbie in the United States on an L1 visa with no or little US credit, contrary to what some people believe. Some US mortgage providers offer affordable loans to non-residents on tickets such as L1 and Non-residents.
Refer to our detailed guide on the step-by-step process to obtain a mortgage as a US Newcomer on an L1 visa with no US credit history.
Mortgage Home Loan Options for L1 Visa Holders with Established US Credit
An L1 visa holder with an established credit score will have multiple home financing options. However, your choices will depend upon how much house you can afford, how much you’re willing to put in as a down payment, and your loan amount.
Therefore, L1 visa holders can apply for all types of mortgage home loans in the US, including FHA loans, conventional mortgages, and jumbo mortgages.
The types of loans foreign nationals can get in the US are:
FHA Loans
FHA Home Loans (Federal Housing Administration) are specialized loans with low application fees and a down payment of just 3.5 percent. Compared to their conventional equivalents, they have much more transparent credit standards.
Conventional Mortgages
For conventional loans, like those provided by Freddie Mac and Fannie Mae, borrowers must present a valid social security number, address evidence, and income proof for at least three years.
Government regulations state that the lender must prove the legal residency of its borrowers, especially overseas buyers. An EAD, an I-765 or I-766, and a valid visa determined by the INS are requirements for obtaining a VA or conventional loan. You can also be asked to present Form I-797A with an I-94 or another legitimate work authorization form.
Jumbo Loans
To qualify for a standard jumbo loan, you must be employed in the United States for the next three years and have lived in the country for at least five of those years. Obtaining a non-conforming Jumbo loan is more complex than getting a VA loan.
Conditions for Non-US Citizens Applying for Jumbo Loans
You must meet the following requirements to qualify for Jumbo Loans:
- You must have lived in the United States for at least five years.
- For the first three years after receiving a loan, you must be able to demonstrate continuous employment.
- Your loan must be used to purchase a condo or a single-family home that the owner lives in and occupies.
- You must put down at least 30% of the purchase price.
- Paperwork Needed for a Jumbo Loan as a Non-US Citizen
Requirements for L1 Visa Mortgage
L1 visa mortgage loans are essentially the same as H1B visa mortgage loans. L1 visa holders can get all types of home loans in the US, including FHA loans, conventional mortgages, and jumbo mortgages.
The only difference is that L1 visa holders may be required to provide additional documentation to prove their employment status in the US. Most lenders require the following:
- Social Security Number, If you are in the US
- Valid work visa
- Two years of US credit history for traditional mortgages (No US credit mortgages are also available)
- Two years of US employment history
- Good credit score, ideally over 670 (No US credit mortgages are also available)
- US income that you expect to continue for at least three years
- Passport
- ITIN – Individual Tax Identification Number
- If you apply for an FHA loan, you will need an Employment Authorization Document (EAD) from the USCIS.
- Proof of Assets – to prove you can cover the loan’s down payment and closing costs.
How do US Mortgage Lenders assess Credit Worthiness?
Your ability to repay the loan is a crucial determining element in whether or not you will be given one. To prove that you can afford to repay the mortgage even if your circumstances change, expect to have to provide a maximum debt-to-income ratio of about 35%.
It can be challenging to establish your creditworthiness if you’ve only recently immigrated to America. You might be able to obtain an international credit history check in this situation to confirm your records elsewhere.
To acquire a pre-approval or mortgage in principle, which means they agree on the amount they would offer you if you discover a suitable house, all of the paperwork above should be given to the bank.
How to Get a Mortgage on an L1 Visa?
If you want to get a mortgage on an L1 visa, the best thing to do is to consult with a few different lenders and compare their rates and terms. Many lenders work with foreign nationals, so it should not be difficult to find one that can help you.
Pre-qualify for a US mortgage as an international buyer.
No US credit history needed.
For those looking to purchase a home while on an L1 visa, a few steps need to be followed to get approved for a mortgage.
Step 1: Estimate Your Budget
Instead of the property value, the most crucial factor to take into account when applying for house financing in the United States as a foreign person is your maximum monthly payment. You will be making a monthly payment for this.
Step 2: Obtain Pre-Approval for a Mortgage
Before starting your search, getting pre-approved for a foreign mortgage loan may provide you peace of mind because you’ll know how much your lender will loan you. Once you have found a lender that you are comfortable with, you can apply for preapproval. The entire process can be completed online, and you should receive a decision within a few days. Preapproval is not required in order to get a mortgage loan, but it can help to streamline the process and ensure that you get the best possible rate.
Step 3: Prepare Your Documents for a Mortgage
Typically, you’ll require proof of the following three points: Identity confirmation and income documentation proving the capacity to pay for a new residence. Additionally, there needs to be proof of assets like savings accounts or equities.
Refer to our Guide to Mortgage Loans from Foreign Nations without US Credit to know more!
Step 4: Make an Offer on Your Selected House
Utilize a real estate agent to help you begin the home search process. A CIPS designated agent is preferred. After completing all of the necessary paperwork, it’s time to finalize your foreign national mortgage loan application.
Step 5: Lock in your mortgage loan’s interest rate
By locking your mortgage rate, you can be confident that it won’t change until the deal is closed.
Step 6: Processing and Underwriting of Mortgage Loans
You will work with a loan processor who is in charge of getting your mortgage loan details and application ready to send to the underwriter.
Step 7: Assessing the property
The process of figuring out a property’s value is called a property appraisal. Real estate is valued using a variety of techniques, such as comparisons to adjacent sales of comparable properties.
Step 8: Closing
Bring your photo ID, a copy of your closing disclosure, any other necessary documents, and all required payments to finish the closing process after underwriting. It’s time to take ownership of this wonderful house. Learn More: Mortgage Closing Process: All You Need to Know About Your Closing and Closing Disclosure
Following these steps can increase your chances of getting approved for a mortgage on an L1 visa. If you want to know more about the U.S. home buying process or work with a real estate agent experienced in international real estate transactions, check out this definitive guide on Buying a house in the U.S. as a foreign national.
What To Do After Obtaining a Mortgage Loan?
Once you have obtained your mortgage loan, there are a few things that you will need to do to ensure that the process goes smoothly.
- First, you will need to find homeowners insurance. Most mortgage lenders require this, as it protects their investment in case something happens to your home. You can shop around for different policies and compare rates before choosing one.
- Next, you will need to set up your escrow account. This is an account where your lender will hold monthly money to pay your property taxes and homeowners insurance on your behalf. The amount held in escrow will be based on estimates of these expenses, so it is essential to ensure that these estimates are accurate.
- Finally, you must ensure you are keeping up with your mortgage payments. If you miss any payments, your lender may begin the foreclosure process. This could lead to you losing your home.
Following these steps ensures that obtaining and maintaining a mortgage loan on an L1 visa goes smoothly.
L1 Visa Home Buying Process
Buying a house on an L1 visa is not that different from the regular home-buying process in the US.
To buy a home in the US, you will need to follow these steps.
Step 1: Decide What and Where You Wish to Buy a House in the US.
Foreign nationals living in the United States should consider commute times, community characteristics, nearby schools (if you have kids), and other aspects while considering buying a home. Similarly, non-resident international investors should research the best cities and states in the USA to live in (and invest in real estate). Set a budget to help you plan your financing alternatives, along with the type and location of the property.
Step 2: Find a Reputable Real Estate Agent with CIPS Designation
Foreign nationals who want to purchase real estate in the United States frequently struggle to find financing and understand the legal system.
These difficulties can be avoided, and the process is made much easier by a real estate agent who has earned the CIPS (Certified International Property Specialist) accreditation.
Find the best real estate agent with international expertise
Connect with a HomeAbroad real estate agent in your area.
Step 3: Start Your Home Search Process with a Real Estate Agent.
It’s time to tell your real estate agent if you’re unsure about the type of house you’re looking for. Your real estate agent will help with the closing process if you find a home and decide to buy it.
Step 4: Make an Offer and Finalize Your Dream Home.
Your real estate agent will give you information on similar homes that have recently sold in the area once you’ve chosen the home you want to buy. With this information, your real estate agent will advise you on the offers you ought to make to the seller. You should put your trust in your professional’s negotiation skills because list prices for real estate are frequently negotiable.
Step 5: Obtain a US Social Security Number (SSN) or Individual Taxpayer Identification (ITIN) Number from the IRS.
Your real estate agent will give you information on similar homes that have recently sold in the area once you’ve chosen the home you want to buy. With this information, your real estate agent will advise you on the offers you ought to make to the seller. You should put your trust in your professional’s negotiation skills because list prices for real estate are frequently negotiable.
Step 6: Apply for a Mortgage From a Lender that Offers to Finance Foreign Nationals and Non-Residents.
Some lenders specialize in offering credit to non-residents and foreign nationals. For instance, you might be able to get the money you need to make your purchase with the help of a mortgage from a foreign lender. They can also reduce the cost and simplify the process.
Foreigners and non-residents typically require additional paperwork, such as evidence of their income and asset ownership.
Step 7: Open a US Bank Account
Open a bank account in the United States and deposit the money required for your down payment and other property purchase costs.
It is critical to realize that the U.S. government has put in place specific regulations in order to better comprehend taxation as a non-resident. Unlike other nations that can charge you extra taxes for buying real estate as a non-resident foreign buyer, the United States does not charge extra taxes to non-resident investors in U.S. property.
Step 8: Conduct a Home inspection.
Even though a home inspection isn’t required before buying it, it’s recommended to hire one to make sure everything is covered. The inspector will make sure the house is physically sound and that all systems are working while looking for any building problems or damages.
Step 9: Sign a Purchase Contract with the Seller and Complete a Title Report.
After making an offer, you and the seller will engage in a sales contract. The contract of sale is the legal document that ties you to the purchase. The agreement will include the price and any other terms that your realtor negotiates.
Once you have signed the contract, the following step is to have a title report performed. In the United States, a title report will list the property’s prior owners and any liens that are currently in place.
Step 10: Take Ownership of Your New House in the USA.
On the day you take possession, there will be a lot of paperwork for you to sign. The deed transferring ownership to you is first signed by the seller. For your protection, the document is notarized and filed with the local government office. The seller will give you the keys so you can move in whenever you choose on the closing day or when you become the new owner.
To know more about the home buying process in the US, refer to our guide on How to Buy a House in the US without a Green Card!
Problems Faced by L1 Visa Home Buyers
There are a few potential problems that L1 visa home buyers may face.
- The first is that it can be difficult to establish credit in the United States if you have only recently arrived. This can make it challenging to get approved for a mortgage loan. However, there are a few things that you can do to improve your chances of getting approved, such as obtaining an international credit history check or using a co-signer with good credit. Or you can take HomeAbroad’s help to connect with the lender that provides a mortgage with no US credit history.
- Another potential problem is that you may not be familiar with the U.S. home-buying process. This can make it difficult to understand all of the paperwork and terminology involved in getting a mortgage loan. However, there are many resources available to help you learn about the process, such as this guide.
- You may face challenges when it comes to obtaining homeowners insurance if you have no previous history of owning a home in the United States. This is because insurers will consider you to be a high-risk customer. However, some insurers specialize in insuring foreign nationals, so it is still possible to find coverage.
However, there are a few things that you can do to increase your chances of getting approved for a loan, such as providing tax returns or bank statements. By being aware of these potential problems, you can be better prepared to navigate the process of buying a home on an L1 visa.
The home buying process for L1 visa holders is pretty straightforward with the right guidance, and HomeAbroad is an excellent resource for individuals who wish to purchase a house in the United States. We may connect you with CIPS-licensed Realtors that will assist you in finding a property that fits your needs and budget. If you have any queries or want to learn more about purchasing a home on an L1 visa, please get in touch with us today.
Frequently Asked Questions
Is L1 Visa Better than H1B Visa for getting a mortgage?
There is no easy answer to this question as it depends on various factors, such as your employment status, income, and credit history. However, L1 visa holders may have an advantage over H1B visa holders when obtaining a mortgage loan because a single company typically employs them for a more extended period. This can make it easier to prove their income and employment history to lenders.
Can I buy a house in the US with an L1B visa?
Yes, you can buy a house in the United States with an L1B visa. However, getting approved for a loan may be more challenging because you may not have a steady income or employment in the United States.
What is the best way to get a mortgage on an L1 visa?
There is no one-size-fits-all answer to this question, as the best way to get a mortgage on an L1 visa depends on your situation. However, some things you can do to increase your chances of getting approved for a loan include obtaining an international credit history check and working with a CIPS-designated Realtor.
What should I do if I am having trouble getting approved for a mortgage on an L1 visa?
If you are having difficulty getting approved for a mortgage loan on an L1 visa, there are a few things that you can do to improve your chances of success. First, you can try to obtain an international credit history check. Additionally, you can work with a CIPS-designated Realtor familiar with the U.S. real estate market and the home buying process. Finally, you can provide tax returns or bank statements to prove your income to lenders.
If you have any queries or want to learn more about purchasing a home on an L1 visa, please get in touch with us today. HomeAbroad is an excellent resource for individuals who wish to buy a house in the United States. We may connect you with CIPS-licensed Realtors that will assist you in finding a property that fits your needs and budget.
What are some common problems that L1 visa holders face when buying a home?
L1 visa holders may face difficulties when buying a home due to their lack of credit history or employment in the United States. Additionally, they may not be familiar with the U.S. real estate market and home buying. These factors can make finding a home that meets your needs and budget challenges.
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