Investing in US real estate can be a great option for Europeans. It can generate income and offer several other benefits. But what about financing the purchase of investment properties in the US? Many investors don’t have the money to buy properties outright. It means you need to investigate the mortgage options for European investors.
US banks will lend to foreign nationals. However, it isn’t as simple as it is for US citizens. The approval process might take longer, and the requirements will be stricter. This post will cover the mortgage options for Europeans investing in the US.
A traditional mortgage from a bank or credit union might be an option for some investors. However, the approval process will be long and difficult. There is even a good chance you won’t get approval. Many lenders avoid lending to foreign nationals because they are a greater credit risk. These mortgages are also harder to sell on the secondary market. That means the lender has to keep it on their books and take all the risk. However, you might get approval if you have established US credit and meet the strict requirements.
Instead of a traditional mortgage, some banks have lending products for foreign nationals. They are usually non-conforming loans. The lender sets its own underwriting policies instead of following the GSE guidelines. They also set stricter requirements. For example, these mortgages usually require a down payment of at least 30%. There is a good chance there will also be higher fees and interest on the home loan. The lender may also set stricter terms for repayment.
An FHA loan will be the best option for European investors in the US. However, an FHA loan will only be available if you are a resident. You don’t even need to be a permanent resident. Even people on temporary work visas might be able to qualify. The US government backs loans that meet FHA standards. If you are a US resident and eligible, it can offer an easier path to a mortgage. The loans also require lower down payments and better terms.
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