Right now, immigration is a hot topic in the United States. Also right now, real estate is a hot market in the United States. And also right now, at the intersection of these two, I field a lot of questions from those with H-1B visas who are looking to get a jumbo mortgage in order to buy or refinance a home. Here are the three most common:
- “Can I get a jumbo mortgage if I am on an H-1B visa?”
- “What are the requirements for getting a jumbo mortgage if I am on an H-1B?”
- “Are the terms any different for a visa holder compared to a US citizen?”
Let’s look at the answers for each, but first delve into just a little bit of the technical definitions of both the H-1B visa and a jumbo mortgage.
Citizenship Status and the H-1B
In mortgage lending, we generally recognize four statuses for citizenship; US citizen, permanent resident alien (green card), non-permanent resident alien and non-resident. In the eyes of most jumbo guidelines, US citizens and permanent resident aliens are essentially treated the same. Non-residents, also known as foreign nationals, are generally not eligible for conventional financing, though there are loan options that exist for them which I have covered in a separate post. The H-1B falls into the non-permanent resident alien status.
An H-1B visa allows an individual to temporarily work in the US in a “specialty occupation.” Specialty occupations may include those in high tech, science, medicine and business/finance. So the question remains, how does the lending industry treat an H-1B/non-permanent resident alien?
One might think that a jumbo mortgage could most easily be defined by loan size — and there is some truth to this. However, in many higher-cost areas of the US, the conforming loan limits differ. Across most of the country, the one-unit conforming loan maximum is presently $548,250. But here in Marin County, for example, our conforming limit is $822,375. So yes, a jumbo loan would be anything over the conforming limit, regardless of location, but there are also some lending options that will allow a jumbo loan below the high-balance conforming loan limit ($822,375, in our example) but above $548,250.
Therefore, “jumbo” is not exclusively tied to loan size and a better definition might go something like this: A jumbo loan has a loan amount that is typically above the conforming loan limit and that follows the qualified mortgage (QM) requirements. Jumbo loans are not securitized by the “agencies,” Fannie Mae and Freddie Mac. Jumbo loans are most often underwritten to a specific investor’s guidelines and funded with that investor’s deposit base. The investor has additional discretion over the qualifying guidelines of the loan itself and this may result in a more intensive process, additional documentation from the borrower and a more restrictive qualifying standard when compared to conforming loans.
Putting It All Together
Now that we’ve established that we have an eligible visa holder and the need for a jumbo mortgage, what will this borrower face once in the loan process? First off, the answer is “yes” an H-1B holder can get a jumbo mortgage! Often at the exact same terms as a citizen or green card holder.
The key sticking points for these borrowers often tend to revolve around history. Lenders like to see a two-year credit history (US credit, FICO scores, etc.) and a two-year tax return history. It’s very difficult for a newly minted H-1B holder to get financing based on the historical proclivities of the lending industry, but once there is a track record, things open up substantially. As for loan amounts, rates, and loan programs, again, so long as the history piece is met, we generally do not find there are any additional restrictions or restraints for a non-permanent resident alien. And yes, we see these applicants all the time here in the tech-heavy Bay Area.
If you are a visa holder and have questions about a jumbo mortgage, don’t hesitate to get in touch. Pre-approval is free and does not obligate any applicant, but before the application is completed, I am available to answer any questions you may have.
Senior 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
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