Is your down payment coming from abroad?
Do you have a foreign bank account that you’re showing on your mortgage application?
Are you obtaining a gift from a family member in another country?
These are all questions that might come up when we’re working with our clients who may be employed by a foreign company or who may be permanent residents (green card holders) or non-permanent resident aliens of the United States. The question really becomes, “Can I use a foreign currency to qualify for a mortgage?” We’ll look at some of the key points to navigating these international waters and assuring safe passage to home ownership here in the US.
Just like with domestic bank accounts, we’re going to ask you for at least two months of bank statements to support the amount of money in any account. If these statements are not in English, translation will be required. Again just as with US bank statements, if we see large deposits into the account, we’ll question their origin and need to “papertrail” how they got there.
Funds Must Be Moved to the US
Here’s perhaps the most important distinction between using US and foreign funds for a home loan transaction: Your foreign funds must be moved to the US to be considered acceptable assets for down payment, closing costs and for reserves (more on this later). So at some point, it will be required that you convert your money to US dollars and transfer it to a US bank account. Be sure that the timing of your loan transaction works with your plans to move the money you have abroad and make sure you understand the process required by the banking institutions (and any limits for movement by the governments involved).
Check with your lender early in the process to be certain that, for any foreign funds you plan to use, the country of origin is not sanctioned by the Office of Foreign Assets Control (OFAC). As of this writing, countries on the OFAC list are the Balkans, Belarus, Burma, Cote D’Ivoire, Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, North Korea, Sudan, Syria and Zimbabwe. This list will change periodically.
If seeking a jumbo mortgage, asset reserves are required. In most cases, it’s not possible to use foreign assets to meet a reserve requirement. In order to cover reserves with a foreign currency, borrowers would most certainly need to consider moving the money to the US first.
We’ve successfully helped buyers use funds held in foreign accounts to obtain FHA, conforming and jumbo mortgages in the United States. But their use definitely requires some additional planning and documentation — in addition to a currency conversion. We’re available to help make sure your foreign assets are moved and documented in the most efficient manner and that your escrow closes smoothly and on time. Regardless of your time zone, call on us if we can be of service.
Robert J. Spinosa
Vice President of Mortgage Lending
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.
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