US Citizens Living Overseas: Mortgage Guide for US Expats Nonresident Investor

The latest estimates show that around 5,1 million US citizens live abroad. And, even though they don’t live in the country, many US expats see a benefit in investing in the US real estate market. After all, it is one of the world’s most developed markets, worth more than 3,81 trillion dollars. 

If you are a US expat looking to invest in US real estate and need an overseas mortgage, you’re in the right place. Also, if you plan to return to the States and want to finance your new primary residence before the move, stick around, as this article might be valuable. 

US Mortgages for Expats: 4 Main Reasons to Finance and Buy US Property 

Here are our top 4 reasons to get expat mortgages and use them to buy property in the US:

1. No Credit Score Requirements and Easy Access to Financial Services

If you spent years in a foreign country, your US credit score might have dropped off significantly to a point where you could be treated almost as a foreigner for the purpose of getting a loan. We say almost because simply having an SSN and being a US citizen will open a lot more doors for you than if otherwise was true. But, at the same time, due to you living in a foreign country, mortgage lenders might not treat you the same way they would a US citizen living in the States. Basically, you’ll be in some sort of middle ground between a foreigner and a US resident. What does that mean? 

It’s simple: As a US expat, you’ll be able to get any type of US overseas mortgage and other financial services much easier than any foreigner could. You’ll be able to qualify for those expat mortgages with your foreign income. And, you don’t need to make money in the US to get access to financial services in the country. However, we should note that it will be difficult to get the same interest rates as a US citizen living in the States (because of the US credit score).  

If you are a US expat with a foreign income and need help financing a property in the States, book a free call with our mortgage expert to learn how we can help. 

2. Want to Own a Home in Your Home Country

Many expats, US or otherwise, want to own property in their country of origin just in case they ever decide to return. For US expats, the property purchasing process is much easier as they have access to various types of financial services that are only available in the States, including, of course, expat mortgages. US citizens will always be looked at more fondly by international mortgage lenders dealing in US loans. They will also be able to get a better deal than other nonresidents. 

3. Want to Invest and Not Deal with Exuberant Taxes

Among many other benefits, investing in US real estate means you won’t have to pay a lot of taxes if you meet certain conditions. If you choose to open a US LLC and purchase a property through it, you’ll be eligible for different tax breaks. The exact tax benefits you can get will depend on the state where you bought your property and the way your US LLC is structured. 

Need help opening a US LLC. For a fee of $1,500, NRI can help you set up your LLC and get the best tax breaks. 

4. Want to Invest Because US Numbers Are the Best

When it comes to investing in rental property, you’ll be hard-pressed to find better numbers anywhere in the world. In the US, houses under 300K can generate in excess of $1,500 per month, depending on their location. This rent money can pay off your loan, allowing you to slowly build equity in the property. It can also serve as a stable source of passive income that will help you live your best life in a foreign country of your choosing. 

US Expat Mortgages: Most Popular Types of Loans

The exact type of loan you apply for will depend on your specific investing or purchasing goals. For example, if you plan to return to the US and want to buy a primary residence, the type of loan you should try to get will be different than if your goal is to buy rental property in the US. Simply put, the reason behind the purchase is what determines the type of loan you should apply for. 

Because the US financial sector is extremely developed, there are almost as many types of loans as there are reasons for buying properties. And, even though that’s great for buyers, it makes it virtually impossible to cover all types of mortgages for expats. For that reason, we’ll only focus on the most popular expat mortgages to give you an idea of what to expect when looking for US loans:

Foreign National Mortgages for Expats

Foreign national mortgage loans are meant for nonresidents (including US expats) who wish to purchase property in the US. You can get this type of loan even if you’ve lost your US credit score or it significantly dropped due to you living in a foreign country. 

The unique thing about these nonresident mortgages is that you can qualify for them using your foreign source income. Even if you don’t live in the US, that doesn’t mean you’ve lost access to various financial services exclusive to the country. It just means that the road to get there has a few extra steps. And, who better to help you than a company that specializes in providing customized expat mortgages to US citizens living overseas?

Are you a US expat looking for a mortgage product to finance a Stateside property? Book a free call to learn how NRI can help you!  

The main requirements of foreign national mortgages for expats include:

• Proof of identity — a valid US passport or ID or other types of documents that prove you’re a US citizen (like an SSN)
• Proof of income from your country of residence — documents that show your income (e.g., pay stubs, tax returns, salary verification from your employer)
• Proof of assets — evidence you have enough money to cover the down payment of 25% (bank statements or other financial documents)
• Down payment between 25% to 30%— the exact down payment will depend on the lender. As a US expat, you might be able to lower the down payment requirement.

Foreign national mortgages for expats are very flexible loans and can be used to purchase various property types in the US:

• Commercial or residential rental properties 
• Primary residences
• Second homes or vacation properties

DSCR Mortgages for Expats

DSCR loans for expats are mortgages that can only be used to buy rental properties. The main metric lenders use to approve these loans is called a DSCR score. By using and calculating a DSCR score, lenders establish whether or not a specific property can generate enough income to cover the loan payments. If a property has a DSCR score of 1, it means it has the ability to cover the loan. Any value below 1 means that the property is not “self-sufficient,” and any value above 1 means there will be some cash left after you pay off the loan payments.  

The higher the DSCR score of a property is, the more chances you’ll get better loan terms from lenders. The down payment for DSCR mortgages for expats is usually between 25% and 30%, with the newest interest rates (August 2024) around 7% to 8%. 

Fix and Flip Mortgages for Expats 

Fix-and-flip loans are a type of expat mortgage used to purchase properties, renovate them, and sell them for profit. These US expat loans are interest-only loans and have a short loan term which is usually between 6 months and 2 years. 

Fix and flip loans have higher interest rates than most other mortgages for expats. Depending on the lender, interest rates can be around 10% (or more).