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Making informed real estate decisions starts with having the right knowledge. At HomeAbroad, we offer US mortgage products for foreign nationals & investors and have a network of 500+ expert HomeAbroad real estate agents to provide the expertise you need. Our content is written by licensed mortgage experts and seasoned real estate agents who share insights from their experience, helping thousands like you. Our strict editorial process ensures you receive reliable and accurate information.
On a builder sale you usually need financing at completion, not a construction loan. Construction loans mainly apply when you build on land you own.
Builder deposits are the largest risk before closing. Check what is refundable, on what conditions, and where the money is held.
Builder incentives are often tied to the builder’s preferred lender. Ask in writing whether the incentive survives if you finance with HomeAbroad.
A remote purchase needs a local team: your own agent, an independent inspector and, after closing, a property manager who can handle warranty claims.
Table of Contents
Foreign nationals can generally buy new construction in the US, and most do it without a construction loan. When you buy from a production builder, the builder pays for the construction. You put down deposits while the house goes up, then close on the full price once the home is finished and the local government has issued a Certificate of Occupancy, the document confirming the building is legally habitable.
That timing is what makes buying a new construction home different from abroad. Your money is committed months before your mortgage closes, the builder’s incentives may depend on using its own lender, and you have to inspect a house you may never walk through in person. HomeAbroad finances completed new builds for international buyers through DSCR and Full Documentation loans, which do not require an established US credit history.
This guide follows the purchase in the order you meet each decision: the contract, the deposit, the incentive, the rate lock, the walkthrough and closing.
Can a Foreign National Buy a New Construction Home in the US?
Yes, in most cases. There is no federal ban on foreign nationals owning US residential property, and builders sell to international buyers the same way they sell to anyone else.
State law is where the exceptions sit. Texas Senate Bill 17, in effect since September 1, 2025, bars certain individuals and entities connected to designated countries from acquiring Texas real property, with a narrow primary-residence exception that does not cover investment property. Florida has its own restrictions with a different scope.
Texas and Florida also issue more single-family building permits than any other state, so confirm with a US real estate attorney that you can buy in your target state before you put down a deposit. The rules by state are summarized in this overview of state foreign-ownership laws.
One boundary applies everywhere: buying a home in the US does not give you a visa, residency or a path to citizenship.
Spec, To-Be-Built, or Custom: Three Ways to Buy New Construction
“New construction” covers three different purchases. Which one you are making decides how long your deposit is exposed, when the appraisal happens and what kind of loan you need, so identify it before anything else.
Quick Move-In (Spec) Homes
A spec home is one the builder started without a buyer, so it is finished or close to finished when you sign. Builders often market these as “quick move-in” or “inventory” homes. You can see the actual house (or a live video of it), the appraiser can value a completed property, and the gap between contract and closing is short. For a first US purchase made from overseas, a spec home removes the most unknowns.
To-Be-Built Homes From a Production Builder
Here you choose a lot and a floor plan in a builder’s community, sign a contract, and pay deposits while the home is built. The builder funds construction with its own financing. You close once, at completion. It is a common route to a brand-new rental, and it is also where deposits, delivery dates and rate locks need the most planning.
Custom Builds on Your Own Lot
If you own land, or buy a lot and hire a builder to put a house on it, nobody else is financing the construction. This is the situation where a construction loan normally comes in, and it is covered in the next section.
Spec home | To-be-built (production builder) | Custom build on your own lot | |
|---|---|---|---|
Home finished at contract signing? | Yes, or nearly | No | No |
Who pays for construction | Builder | Builder | You, usually with a construction loan |
Your exposure before closing | Earnest money for a short period | Deposits for the full build period | Land cost plus construction draws |
Appraisal | On the completed home | Based on plans and specifications, with a completion inspection | Based on plans, then inspections during the build |
Typical HomeAbroad path | DSCR or Full Documentation loan at closing | DSCR or Full Documentation loan at completion | Outside HomeAbroad until the home is finished |
Fit for a remote first purchase | Strongest | Workable with a local team | Hardest to manage from abroad |
If the community you are looking at is built and leased mainly as rental housing, the dynamics of buying inside a build-to-rent community are different enough to read separately. If you are comparing a new build against a renovated existing home, see how turnkey rental properties are vetted.
Do You Need a Construction Loan to Buy a New Build?
Usually not. If you are buying from a builder, you need a mortgage that funds when the home is complete, and that is the financing HomeAbroad provides. A construction loan is for someone paying a builder to build on their own land.
Why the Builder Usually Carries Construction Financing
Production builders borrow to buy land and build homes, then repay that debt when each home sells. Your contract is a promise to buy the finished house at an agreed price. Until closing you own nothing; you have a contract and the deposits you paid under it. At closing, your mortgage and remaining funds pay the builder in full and title passes to you.
This matters for planning. Your lender is underwriting a completed property, so the loan you line up before signing is the same one that will fund at the end.
Construction-to-Permanent Loans: Where They Fit
A construction-to-permanent loan funds a build in stages, called draws, and then converts into a long-term mortgage once the home is finished. A one-time-close version has a single application and closing. A two-time-close version uses a short-term construction loan and then a separate mortgage that pays it off.
These loans suit a custom build on land you control. They are harder for a nonresident to obtain because the lender takes on construction risk, inspects each stage, and usually wants the borrower close at hand. HomeAbroad does not offer a construction or construction-to-permanent loan.
DSCR Financing at Completion
A Debt Service Coverage Ratio (DSCR) loan qualifies on the property’s rental income. The lender divides the property’s monthly rent by its full monthly payment, known as PITIA: principal, interest, property taxes, insurance and any homeowners association (HOA) dues. A result of 1.0 means the rent exactly covers the payment.
A brand-new home has no tenant and no lease, so the rent figure comes from the appraiser. On a single-family rental, the appraiser completes a market rent schedule (Fannie Mae Form 1007) using comparable rentals nearby. The builder’s rental projections and online estimates do not replace it. On a to-be-built home, the appraisal is completed “subject to completion” from the plans and specifications, and the appraiser re-inspects once the home is finished. The loan funds after the Certificate of Occupancy is issued.
The current HomeAbroad DSCR program page lists these terms:
Features | Requirements |
|---|---|
DSCR Ratio | = 1 for best terms, <1 eligible with a higher down payment. We provide DSCR Loans for foreign nationals with a DSCR ratio as low as 0.75, meaning you are eligible even if your rental covers just 75% of the mortgage. |
Credit Score | No US Credit History Required |
Down Payment | 25% |
LTV Ratio | Purchase: Up to 75% |
Cash Reserves | 6 Months |
Full Documentation Loan at Completion
If the property’s rent does not carry the payment, or you plan to use the home yourself for part of the year, a Full Documentation Loan qualifies you on your foreign income, assets, debts and credit profile instead. It is a non-qualified mortgage (non-QM), meaning it is not written to Fannie Mae or Freddie Mac guidelines, and it can use an international credit report or approved alternative credit evidence.
Paying Cash, Then Refinancing
Some buyers close in cash to keep the builder’s timeline simple, then refinance into a DSCR loan once the home is leased. This removes rate-lock risk but ties up the full purchase price, and refinance rules on newly acquired property, including how soon you can take cash out and how much, vary by program.
Which Financing Path Fits
Path | When it fits | ||||
|---|---|---|---|---|---|
Construction-to-permanent | Custom build on land you own | Construction lenders | Borrower credit, income and the build plans | One or two | Cost overruns and draw inspections from abroad |
DSCR loan at completion | Spec or to-be-built home bought as a rental | HomeAbroad | Appraised market rent against PITIA | One | Rent or tax figures that shift before closing |
Full Documentation Loan at completion | Rent does not carry the payment, or partial personal use | HomeAbroad | Foreign income, assets and credit profile | One | Documentation time from overseas |
Cash, then refinance | Buyers who want to remove lock and timing risk | HomeAbroad | Cash at purchase; DSCR at refinance | Two | Capital tied up until refinance |
Steven Glick
Director of Mortgage Sales · HomeAbroad
Foreign buyers should speak with HomeAbroad before reserving a lot or signing the builder contract. We want to review the projected rent, financing structure, down payment and timeline early. Waiting until the home is nearly complete can create problems if the property no longer supports the required DSCR, the builder’s contract limits financing options, or the buyer has not allowed enough time for underwriting and closing.
Before you reserve a lot or sign a builder contract, get pre-qualified for a DSCR loan so you know what the property needs to support. If your income is the stronger case, compare the Full Documentation Loan. For how files are reviewed, see how foreign-national mortgage underwriting works.
Builder Deposits: How Much, When, and What Protects Your Money
On a to-be-built home, your deposits are at risk long before your loan closes. Builders set their own deposit schedules and refund terms, so the contract decides how much you could lose and when. Read those clauses before anything else in the document.
Earnest Money vs Design and Upgrade Deposits
Earnest money is the good-faith deposit you pay when the contract is signed. On a resale purchase it usually sits with a title or escrow company and is applied to your down payment at closing. Builder contracts often add more deposits: a payment when you choose options at the design center, a premium for a particular lot, or a structural upgrade deposit.
For each payment, the contract should tell you three things: whether it is credited toward the purchase price, whether it is refundable and under what conditions, and who holds it. Option and upgrade deposits are frequently non-refundable once the builder has ordered materials, because the builder cannot resell your choices to the next buyer. Ask HomeAbroad before signing whether these deposits will count toward your down payment and what records the file will need.
Where Your Deposit Is Held
Some builders hold deposits in a third-party escrow account. Others deposit them into their own operating funds. State law varies, and the difference matters if the builder runs into financial trouble before your home is finished.
Florida is a useful example. Under Florida Statutes §501.1375, a builder or developer selling a one- or two-family home must tell the buyer that deposits up to 10% of the purchase price will be placed in an escrow account with a bank, attorney, licensed broker or title insurer, unless the buyer waives that right in writing. Read the contract for that waiver before you sign it. Condominiums and other states follow different rules, so ask your attorney what applies to your property.
The Financing Contingency Gap
A financing contingency lets you cancel and recover your deposit if your loan is not approved. Some builder contracts limit this protection, shorten the window to apply, or tie it to using the builder’s preferred lender. Before you sign, check:
- Whether the contract has a financing contingency at all
- How many days you have to apply and to obtain a loan commitment
- Whether the contingency still applies if you finance with a lender other than the builder’s
- What evidence of denial the builder requires to release your deposit
This is the practical reason to get HomeAbroad pre-approval before signing a builder contract. A contingency protects you only if you can meet its deadlines.
Federal ILSA and the Two-Year Completion Rule
The federal Interstate Land Sales Full Disclosure Act (ILSA) requires certain developers to give buyers a property report and can allow buyers to cancel when the rules are not followed. It mostly affects lot sales and pre-construction condominiums. 15 U.S.C. §1702(a)(2) exempts the sale of land under a contract that obligates the seller to erect a building on it within two years, which is why many builder contracts promise completion within that period. Whether a contract qualifies for the exemption is a legal question; if your contract’s completion language is vague or open-ended, have an attorney review it.
Sending Deposits From Abroad
Wire deposits from an account in your own name, and keep the bank confirmation for every transfer. Underwriters trace the down payment and reserves back to their source, and a clean record from the first deposit avoids delays at closing. See what lenders expect when documenting your source of funds, and whether opening a US bank account makes sense before you start.
Check wiring instructions every time: Wire fraud targets real estate deposits. Before any transfer, call the builder or title company on a phone number you found independently, not one included in an email, and confirm the account details. Treat any message announcing "updated" wiring instructions as suspect.
When wiring builder deposits from overseas, keep the full paper trail. Save the wire confirmation, bank statement showing the funds leaving your account, and proof of the deposit paid. Matching names and amounts across these documents helps underwriting verify the source of funds.
Builder Incentives and the Preferred Lender Question
Builder incentives are worth negotiating for, but many are written so that you receive them only if you finance with the builder’s own or preferred lender. Settle in writing how the incentive is paid before you choose your loan.
What Builders Are Offering Right Now
Incentives are common at the moment. In the NAHB/Wells Fargo Housing Market Index for September 2026, 66% of builders reported using sales incentives, the highest share since December 2025. In the same survey, 38% reported cutting prices, and the average price reduction was 6%.
Incentives usually take one of four forms: a price reduction, a credit toward closing costs, a mortgage rate buydown, or included upgrades. A buydown is money paid at closing to lower the interest rate, either for the life of the loan (permanent) or for the first one to three years (temporary).
Can a Builder Require You to Use Its Lender?
Many large builders own a mortgage company or have preferred lender relationships. Federal rules limit how far a builder can push you toward its affiliate on loans covered by the Real Estate Settlement Procedures Act (RESPA). Under Regulation X, a referral to an affiliated provider is permitted only if the buyer is not required to use that provider. The same regulation also says that offering a discount does not count as “required use” as long as the discount is optional and a true discount. That is why builders present lender perks as incentives you can take or leave.
There is a catch for investors. RESPA exempts credit extended primarily for business purposes, and federal rules treat a loan to buy a rental property that the owner will not live in as business-purpose credit. A DSCR loan on a rental will often fall outside RESPA, which leaves the builder contract as your main protection. Read what it says happens to the incentive, and to your deposit, if you finance elsewhere.
Keeping the Incentive When You Finance With HomeAbroad
Ask the builder these questions in writing before you sign:
- Is the incentive conditioned on using your lender? If so, what is the value of the incentive without it?
- Can the same amount be applied as a price reduction or a closing-cost credit instead?
- Is a rate buydown offered as cash at closing that any lender can apply, or only through your lender’s pricing?
- Will you put the final incentive terms into the contract or an addendum?
Then share the answers with your HomeAbroad loan officer. Seller-paid credits are capped by loan program and LTV, and some buydown structures may not be accepted on a given program. A credit above the cap is lost value, so the structure matters as much as the dollar amount.
Price Cut vs Closing Credit vs Rate Buydown: What Each Does to Your DSCR
The same incentive dollars affect a DSCR loan differently depending on how they are paid:
- A price reduction lowers the purchase price, so the loan amount, the down payment and usually the property tax estimate all fall. The monthly payment drops and the DSCR rises.
- A closing-cost credit reduces the cash you bring to closing. It does not change the loan amount or the monthly payment, so the DSCR stays where it was.
- A permanent rate buydown lowers the interest rate for the life of the loan, which reduces principal and interest every month and raises the DSCR. A temporary buydown lowers the payment only for the first few years; ask HomeAbroad which payment the program uses to qualify the loan.
Builder incentives can create problems if the loan program cannot recognize the incentive as structured. Before signing, ask whether it can be applied as a price reduction, closing-cost credit, or approved rate buydown. Getting the terms documented upfront helps avoid losing value at closing.
For the investor side of this question, including market rent, tax and HOA review on new builds, see this analysis of new-construction DSCR financing.
Matching Your Rate Lock to the Builder’s Delivery Date
A rate lock holds your interest rate for a set period. On a to-be-built home, the builder controls when that period needs to end, so plan the lock around the contract’s dates.
Estimated vs Outside Completion Dates in the Contract
Builder contracts often give an estimated completion date and, separately, a latest date by which the builder must finish, sometimes called the outside date. The estimate is a forecast and can move with weather, labor, inspections and utility hookups. The outside date is the commitment, and it is usually the date tied to the two-year ILSA exemption described above. Lock planning should start from the outside date, because the estimate is the one more likely to move.
What Happens if Completion Slips Past Your Lock
If the home is not finished before your lock expires, the usual options are paying to extend the lock or repricing at the current market rate. Some programs also offer longer lock periods for new construction at a higher cost. Your HomeAbroad loan officer will explain which lock periods and extension options apply to your loan, so you can plan the lock around the builder’s expected closing window.
Steven Glick
Director of Mortgage Sales · HomeAbroad
When a builder’s completion date moves past the rate lock, the buyer may face an extension cost or a new market rate. Before signing, understand the expected closing window, available lock periods, and what happens if construction is delayed. Planning for that possibility early can prevent an unexpected financing cost later.
Overseeing a New Build From Outside the US
You can buy a new construction home without visiting, but you cannot oversee it alone. Put three people in place before you sign: a buyer’s agent, an independent inspector and, for a rental, a property manager who will take over after closing.
Bring Your Own Agent From the First Contact
The sales agent in the builder’s model home works for the builder. A buyer’s agent represents you: reading the contract, pushing for incentives, chasing the punch list and attending inspections you cannot. Many builders require your agent to be registered at your first visit or first inquiry, and will not work with an agent introduced later. Contact your agent before you fill in a builder’s website form or tour a model by video.
HomeAbroad connects international buyers with an international-buyer real estate agent in the target market. Agents who hold the Certified International Property Specialist (CIPS) designation have training in cross-border transactions.
Independent Inspections at Key Stages
A new home passes municipal code inspections, but those check minimum code compliance for the local building department. An inspector you hire checks the work for you. On a to-be-built home, three inspections cover most of the risk:
- Foundation: before or just after the slab is poured, to check forms, reinforcement and drainage
- Pre-drywall: after framing, plumbing, electrical and HVAC are in but before walls are closed, when hidden problems are still visible
- Final: before the walkthrough, so the punch list reflects the inspector’s findings
Check the contract for inspection access. Some builders restrict when outside inspectors can enter the site or require advance notice.
Final Walkthrough and Appraisal Inspection
The final walkthrough gives you an opportunity to identify unfinished work or defects before closing. Your buyer’s agent or inspector can attend on your behalf if you cannot be there in person. Focus on confirming that major systems, appliances, doors, windows, finishes, and exterior areas are complete and that any outstanding issues are documented in a written punch list.
Before HomeAbroad can fund the loan, the property must meet the program’s completion requirements. This may include the Certificate of Occupancy and a final appraisal inspection confirming that the home was completed according to the original appraisal. Your HomeAbroad loan officer will guide you through the documents and completion requirements needed before closing.
Closing on Your New Construction Home
New construction closings follow the same basic process as other US property purchases, with a few additional completion requirements. If you are buying from outside the US, your title company and HomeAbroad loan officer can help coordinate the signing process and confirm which remote closing options are available for your transaction.
You should also finalize how the property will be titled before closing. If you are purchasing through a US LLC, discuss the structure with your attorney and tax adviser early, since changing the vesting arrangement late in the process can delay closing.
HomeAbroad helps foreign nationals finance eligible new construction properties with mortgage solutions designed around their investment needs. Depending on the property and your financial profile, options may include a DSCR Loan based primarily on the property’s rental income or a Full Documentation Loan using your income and financial documentation.
Planning to buy a new construction property in the US? Get pre-qualified with HomeAbroad to understand your financing options before you commit to the builder.
Frequently Asked Questions
Is Buying a New Construction Home a Good Investment for a Foreign National?
It can suit investors who value low early maintenance and predictable costs, which matter more when you manage from another country. The trade-offs are a price you should test against nearby resale homes, property taxes that rise after reassessment, and, in communities with many rentals, competition for tenants and a smaller pool of owner-occupant buyers when you sell. Judge each property on its own rent, taxes and HOA costs.
Can I Buy a New Construction Home in the US Without Visiting?
Yes. Contracts, deposits, inspections, the walkthrough and closing can all be handled remotely with a buyer’s agent, an independent inspector and an approved signing method. What you give up is your own eye on the property, so the quality of that local team matters.
Is a Builder Deposit Refundable if My Financing Falls Through?
Only if the contract says so. Refunds depend on the financing contingency, its deadlines and whether it requires the builder’s lender. Pre-approval before you sign makes it far less likely that you will need to rely on that clause.
Can I Negotiate the Price on a New Construction Home?
Often, yes, particularly when builders are using incentives to move inventory. In NAHB’s September 2026 survey, 38% of builders reported cutting prices. Completed spec homes that have been on the market for a while tend to offer the most room. If a price cut and a lender-linked incentive are both on the table, compare their effect on your loan before choosing.
Can a US Newcomer on a Visa Buy a New Build to Live In?
That is a different financing question from an investment purchase. HomeAbroad’s US Newcomer Mortgage is desiCan a US Newcomer on a Visa Buy a New Build to Live In?gned for eligible borrowers who are new to the US and may not have an established US credit history; eligibility depends on status, documentation and occupancy.
