Foreign National Mortgage Loans
We are here to help!
Here are some questions a customer asks:
- What are the pros and cons of using a 1031 exchange for a Canadian Citizen buying rental properties in the United States?
- How do I build American FICO?
- What are the different types of loans that are available to me as a non-US citizen?
- What information do I need to provide to qualify for a bank statement loan or a DSCR loan?
- What are the closing costs associated with these types of loans?
- What is the timeline for closing on a loan?
Couple issues in advising you what mortgage type is the best for your needs:::
1031 Exchange only helps you on the US IRS and applicable state returns not Canadian revenue ones.
The 1031 has strict timelines. It is not always prudent to use that tool as the timing of selling in US can be quick if you price to market but finding the replacement property with same valuation not easy at all in the deadline. If the gain is small the risks are too high.
To purchase 3-4 units now in the US you need 20% cash down plus the costs minimum, some terms are shifting to 25 down as in the US many mortgage companies are in trouble.
An ITIN number does not build a US FICO score. We can use your Canadian credit if you have a standard Canadian mortgage with paid as agreed proof for 24 months in the past to show credit paid as agreed.
We use the net after all expenses on the IRS return to show income. Typically anyone filing their first investment real estate return does not show a high number for the net. What did you show? Your Canadian returns do you show a salary job or self employed? Maybe you can qualify for a Fannie or Freddie loan but for GSE US government loans you need 25% down. I would need the numbers on both tax returns. Rate for full documentation GSE loan today is around 7.25% with 1 point no prepay, 30 year fixed if you have 36 months history paid as agreed credit.
There are other types of mortgage loans available. Here are a few:
Bank statement loans were we use ONLY ONE bank account and total up the deposits. We take out transfers from your own accounts, refunds, and an expense ratio to come up with income. Bank statement loan for non US citizen is 25% down 8% 30 year fixed with .5% points no prepay again we will use 36 months prior credit history to build a report APR 8.522
DSCR we use the market rents that the appraiser says is real plus rental agreements and a deposit check. this type loan you need 20% down and the property cannot be a fixer as you need to be able to rent at close and show the lease and deposit. Rates for these 7.5% with 2 points 30 year fixed 2 year prepay APR 8.011
5-8 Units is another bucket no government loan
Can do DSCR, bank statement, or full doc to qualify 25% down or more depending on city.
Rates 8% 30 year fixed 2 points 2 year prepay APR 8.714 Appraisal can be very expensive for 7 units $2000 for example
APR is points and fees added up and averaged 12 months
Full doc means all pages and not photos- clear jpg's nothing cut off or blurry
your Canadian revenue returns 2021 2022 all pages
US return 2021
current paycheck stubs
job history past five years
mortgage bills
fire insurance bills
schedule of real estate owned
bank statements past 60 days all pages
Identification
Bank statement loans:
You send ONE account for past 24 months
Identification
mortgage bills
fire insurance bills
job history
schedule of real estate
DSCR:
same as bank statement but only 2 months statements
plus the ID, mortgage bills, fire, job history, schedule
Rates and terms change EVERY DAY so this is NOT a rate commitment. You need a live
accepted offer to have a rate commitment. You need the funds and statements translated
into english and US dollars. All wires to title have to come from US dollars.
There are no upfront costs. When you have a contract you give your earnest money and we
track and trace movement of all funds day by day. Then you will open escrow/title/attorney depending on the state. You pay the appraisal company directly by credit card 4 plex simple costs $600-800. You will set up US fire policy per the state and flood if in the zone. We send out about four estimates during the process. We email Monday through Friday and will push if we don't get response from you in 24 hours. At closing you must be signed by a US approved notary, which the title company controls. We do not allow digital signing for Foreign Nationals. If you are married and she is not going on the loan she has to sign to acknowledge this. A loan can be closed in twelve days if you are responsive and go to the title company to sign (arranging a notary at a US embassy adds a week or more).
This is NOT a loan Commitment
Rates change daily. Terms are always changing
Caroline Gerardo,
NMLS# 324982
(949) 784-9699
