If you own a home, you know the feeling of accomplishment that having something to call your own brings. This gift is something that anyone in the United States can experience whether they are a citizen or not. While there are advantages for those that are a U.S. citizen, a foreigner has every right to buy a home in the United States.

When you are looking to buy a home, but you are not a U.S. citizen, there three things to know: yes, you can, but it might be hard to get a loan, make sure to have your documentation in order, and be aware of the tax implication of being a foreigner. Let’s dive into each of these points.

  1. Yes, You Can Buy a Home, But It Might Be Hard to Get a Loan
    If you have an all cash payment, buying a home will not be a problem. It is when you try to get a mortgage loan that gets to be the tricky part. Many people are not in a position to put down that much cash to buy a home.
  2. Get Your Documentation in Order
    For anyone buying a home whether you are a citizen or not, most people will have to go through a lender to acquire the money to pay for the house. The first step is to check with a recommended lender in your community to find out the exact documentation you will have to have.

    To give you an idea of what you might need, for all people looking for a loan, the lender will check your credit score, your financial situation, how many assets you have, how much you are in debt, and your current income.

    Some non U.S. citizen buyers have found that this seems to be the toughest part. They have found that they had to have up to 50% cash as a down payment in order to get a loan, along with great credit. Make sure to get a second opinion or even a third. Ask friends who own a home to give you a referral of a lender. Do not stop at one person’s opinion. You can also get great referrals from your real estate agent.

    Make sure to have your tax statements, 1099s, and income pay stubs so that your lender can verify your financial situation.

    This process can be difficult regardless of being a US citizen or not. If owning a home is something you really want, you can make it happen. You do need to make sure you are fully informed about what you need. Getting the right advice will be very helpful in this process.
  3. Be Aware of Taxes When Selling
    This is a great area to get advice from a tax specialist in your community. While we are not experts in this area, we can give some insights from our experience. One area that is important for those that are not U.S. citizens to understand is when you go to sell your home you will want to be prepared that the buyer will be required to withhold 10% of the gross income of the sale. This is a requirement for anyone buying real estate owned by foreign nations.

    The IRS has set up this requirement to keep foreigners from avoiding the payment of taxes. The buyer then will report the purchase and pay the IRS the amount withheld. While there are exceptions, it seems that across the board when going to resell your home, you might have to be prepared to pay some taxes.

Wrapping Up

Non U.S. citizens are able to purchase a house in the United States, and it helps to know what to expect. If you or anyone you know is not a U.S. citizen and would like to purchase a house, please call our office. We are here to help.