Guide to US Mortgages for Chinese Nationals

Are you looking to get a US mortgage for Chinese citizens to help you buy real estate in the States? If that’s the case, know you’re not alone. 

Since 2010, Chinese nationals have bought more than 344,000 residential properties in the US. According to statistics about foreign investment in US real estate, they are the biggest spenders out of all foreign buyers. Between April 2022 and March 2023, Chinese citizens collectively invested more than $13,6 billion in US real estate. 

A large percentage of that money (around 70%) came directly from the cash reserves of the hard-working Chinese people, but some of it didn’t. A part of that sum came from US mortgage lenders. But how is that possible, and how can the Chinese get a mortgage in the USA? To find out, you’ll just have to keep reading. 

Can Chinese Get Mortgage in USA?

Yes, Chinese citizens interested in buying US property can get a mortgage loan in the US, but the process can be challenging. Traditional US banks don’t like working with foreigners for various reasons, which limits the availability of US mortgages for Chinese citizens. However, regular banks are not the only ones offering loans. In the US, there are also private lenders that offer mortgages. And, many of those private lenders regularly work with foreign clients, including those from China. The only problem is — how to get in touch with them?

The best way to find a lender that offers US mortgage for Chinese citizens is to contact a mortgage broker with international experience. Their job is to connect clients from around the world (including China) with US lenders who work with foreigners. Brokers will help you through the entire mortgage process and can show you how to qualify for a US loan even if you don’t have a US credit score, history, or Green card. 

3 Main Differences Between US and Chinese Mortgages

Here are the two main differences between US and Chinese mortgages. 

1. Down Payment 

A down payment in the US, depending on the exact type of mortgage, is usually between 15% and 25%. It can be lower for US citizens with good credit scores but is typically in the before-mentioned range. On the other hand, in China, a typical down payment, regardless of your citizenship, can sometimes start at 20% but is usually 30% or higher.

2. Credit Scores

In the US, a credit score is based on financial responsibility and anything outside of that has little to no impact on a person’s ability to qualify for a loan. In China, things are a little bit different. Credit scores are directly connected to the social credit system. Because of that, being financially responsible is not enough to have a good credit score; you also need to be a “good citizen”. Having views that are not in line with the Chinese government or expressing unpopular opinions can negatively affect your social credit score (and regular one) and ultimately your ability to get a mortgage. 

3. Interest Rates

In the US, mortgage interest rates are typically based on borrowers’ credit scores and market conditions. This means that the market dictates how high or low interest rates are. In China, interest rates for mortgage loans are usually set by the government and are highly influenced by the country’s central bank. The interest rate in the US is 5% (October 2024). In China, interest rates for people with great credit scores and social scores are around 3,4% (October 2024).

US Mortgage for Chinese Nationals: 4 Key Steps 

Getting mortgage in USA as a Chinese citizen is not an easy process and can involve quite a lot of steps. Now, to make the whole thing less difficult, we’ve created a list of key steps to help you on your journey. These steps are:

1. Figure Out Your Purchasing Reason

The first step to finding a US mortgage for Chinese citizens is to figure out the reason for the purchase. In the US, there are almost as many types of loans as there are purchasing reasons. By determining the reason first, you’ll be able to figure out which exact type of loan will best suit your needs. For example, if your goal is to buy a rental property, you should be looking for loans for investors. On the other hand, if you want to buy a vacation property or a second home, investor loans won’t work for you, and you should search for other types of mortgages. 

2. Choose a US State 

Each state in the US has different laws for purchasing, owning, or renting properties. Because of that, every state technically operates as a separate country, at least when it comes to real estate. For that reason, choosing the correct state is extremely important, especially if you want to buy investment properties. 

Some states are more open to foreign investment and have laws protecting property owners, while others don’t. Florida is famously a landlord-friendly state and is excellent for investing in long and short-term rentals. California is popular with those looking for vacation or second homes, but its strict regulations and tenant-friendly laws make it less favorable for buying rental properties. If you want to learn more about choosing the best location for a rental property in the US, check out the linked article. 

3. Prepare Documentation

After you’ve determined your purchasing reason and chosen a US state, you can start preparing the necessary documents. This can be tricky, as the documents you’ll need will depend on various factors, like the US state you want to buy property in, the exact mortgage lender, and so on. However, with that being said, there are certain types of documents you’ll need to have regardless of any factors:

• Documents that show your foreign income or financial assets — tax returns, bank or investment statements
• Documents that prove your identity — national ID, valid passport, or US visa or residency permit (not necessary, but having them can help you get a US mortgage for Chinese citizens)
• Documents that prove you have funds to cover the down payment — usually bank statements 
• Documents for a US LLC — to buy rental properties in the States, you must open a US LLC and a US business bank account. 

4. Connect With a Mortgage Broker

Getting mortgage in USA as a Chinese citizen is difficult, especially if you’re trying to do it on your own. Without the right connections and inside knowledge, you could fail to find a US lender willing to work with foreigners. And, let’s face it, nobody likes failing.

But don’t worry; there’s a way to avoid failure and ensure you get a US mortgage for Chinese nationals. How? It’s simple: you should contact a mortgage brokerage company that deals with international clients. These companies specialize in finding loans for nonresident buyers and can help you with all the ins and outs of getting a mortgage in USA as a Chinese citizen. 

Are you looking for US mortgage for Chinse nationals? Schedule a free 30-minute consultation with NRI’s mortgage expert to learn how we can help you.

Most Popular US Mortgages for Chinese Citizens

Here are some of the most popular US mortgages for Chinese citizens:

Chinese Getting Mortgage in USA: Foreign National Mortgage Loans

Foreign national mortgages are US loans that allow Chinese nationals to finance properties in the States, even without having a US credit score, history, or Green Card. This makes them quite popular with all foreigners, including those from China. The down payment for this type of US mortgage for Chinese people is usually between 25% and 30%. Interest rates are usually around 0,6% to 1% higher when compared to traditional loans. 

Foreign national loans are very accommodation and can be used to purchase various types of US properties, including:

• Primary homes 
• Second homes
• Commercial rental properties
• Residential rental properties
• Vacation homes

Chinese Getting Mortgage in USA: F-1 Student Mortgage Loans 

F-1 student mortgage loans are a unique type of US mortgage that allows international students (including those from China) to purchase properties in the States. The main requirement for this loan is an F-1 student visa (i.e., you or someone from your family needs to have one to apply for this mortgage). 

The idea behind F-1 mortgages is very simple — instead of renting as a foreign student for at least four years, it’s better to take out a mortgage loan and use the rent money to cover the loan payments. You get to live in your own home for basically the same amount of money you’ll spend on rent. And, if you’re smart, you’ll rent the spare rooms and use that income to cover the loan. The down payment for this type of loan is around 25%, and the interest rates are slightly higher than those of conventional loans.   

Chinese Getting Mortgage in USA: DSCR Loans for Foreigners

DSCR loans for foreigners allow international investors from China to qualify for a loan based on the property’s rental income rather than personal finances. Lenders evaluate whether a property qualifies by calculating its DSCR score (a metric for determining a property’s ability to cover loan payments). A DSCR score of 1 indicates that a property can generate enough income (via rent) for the loan. And any score above 1, means that there’ll be some money left over after covering the payments. 

DSCR loans for foreigners are for buying rental properties in the US and can only be used by investors. They have a slightly higher down payment, somewhere between 25% and 30% of the property’s value. The interest rates for DSCR loans are between 7% and 9% (October 2024), which is a bit higher than regular mortgages. However, unlike traditional loans, to apply for a DSCR loan, you don’t need a US credit score or a Green Card.

The loan limit is usually 2 million dollars but can be higher depending on the lender. The great thing about these mortgages is that you can buy more than one property with a single DSCR loan as long as the overall loan value does not exceed the maximum limit.

Chinese Getting Mortgage in USA: Fix and Flip Loans

Fix-and-flip loans are investor-only US mortgages for Chinese Citizens. Their primary purpose is to finance the purchase of undervalued properties that can quickly be fixed and sold for profit. They are short-term loans with a term length usually being between 6 months and 2 years. 

The interest rates are higher when compared to traditional loans and are around 10%. These mortgages are usually interest-only. What that means is that loan payments only consist of interest. The principal is paid off after the property is sold or refinanced. The down payment for fix-and-flip mortgages is between 25% and 30%.