California has both a dynamic and desirable real estate market and in the recent years we’ve seen an influx of foreign buyers. Despite the headlines such as, “Chinese Billionaires Snapping Up San Francisco Real Estate with All Cash Offers 150% Over Asking…,” I can attest that not every foreign buyer is able to purchase real estate with a Louis Vuitton suitcase bursting full of hard currency. In fact, many of them seek mortgage financing for any number of valid reasons and when they do, we are often able to help.
Foreign nationals are citizens of another country. They have their primary residence abroad and their employment is usually headquartered in that nation. In order to travel to the US they will need a valid passport and, sometimes, visa, and so we’ll ask for these documents. An important point here is that we are NOT looking to lend to primary home buyers on this program. Why? Because if someone is purchasing a primary home here but is a citizen of another country, there is very likely an immigration issue. So on this program, we will accept second homes and, on occasion, rental properties.
What about income and employment? We can document earnings for the borrower in a number of ways but it will largely depend on the country of origin and the customary manner in which income is reported in that place. Take Canada, eh? They have tax returns that are nearly identical to ours and they have a form that is eerily similar to our W-2. Oh, and even though they talk funny, most of them speak English so it’s easy to interpret any documents. But if in French (or any other foreign language), official translation is permitted as well.
Assets are documented through bank statements, just as they are domestically and internationally recognized institutions are pretty much a requirement here. Please be aware that there are some countries affected by sanctions (Iran is one, for example) and funds from their institutions may not be allowed. But you get the idea. If the funds are sourceable, and the country is not subject to any restrictions, we should be OK.
Ah, and what about credit? How do we know that an international borrower is creditworthy when we don’t have the benefit of a credit report? This too will depend on the circumstances. Sometimes a foreign credit report is available, but often we can use letters from creditors to document timely payments on rents, autos or other obligations. At the end of the day though, FICO scores are not required on this program.
With all of the above, we’re in good shape to lend up to 60% of the purchase price/value of a home up to a loan amount of $2MM. And we can go higher on loan amount with lower loan-to-value (LTV). But let’s not forget perhaps the most important aspect of the foreign national loan program: Some of our existing, non-permanent resident aliens (those on work visas) may also be a fit. Today’s jumbo loan requirements often require a two-year US tax filing history and a two-year US credit depth in order to obtain best terms and it is not unusual for those newer to the country (but on a work visa) to not yet have the requisite history. Our foreign national loan will take them in and allow them to borrow up to 70% of the purchase price (to a loan amount of $2MM).
Our foreign national loan program can be the passport to home ownership in the US for those abroad, and for those who are new to the states but actively transitioning from a work visa status to something more permanent (green card, for example). If you have questions about this program, don’t hesitate to get in touch today!
Stars in his eyes,
Robert J. Spinosa
Vice President of Mortgage Lending
Cell/Text: 415-367-5959 Fax: 415-366-1590
Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960
Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709
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