Everyone deserves the American dream even if they’re not considered permanent residents of the United States. If you’re a non-permanent resident looking to purchase a home, understanding the guidelines and services available is essential to ensure a seamless process. Here’s a breakdown of the overall process and the mortgage solutions that can help you purchase a home on U.S. soil. 

 

Non-Permanent Resident vs Permanent Resident  

  • The IRS defines a permanent resident as someone who is taxed on their worldwide income, like U.S citizens. To be a lawful permanent resident an individual must either obtain a green card or be residing permanently as an immigrant.  
  •  According to the IRS a non-permanent resident is anyone living in the U.S who does not meet the Green Card or Substantial Presence Test. Typically, new arrivals on a J-1 or F-1 visa, foreign exchange students, and people living here for temporary employment are generally considered non-permanent residents. 

 

Documentation Required for Non-Permanent Residents 

All Non-Permanent Residents who possess a minimum of 2 years of work history, credit history, as well as a valid Social Security Number are eligible for a mortgage.  

Employment Authorization  

  • Copy of EAC.  
  • If EAC expires within 1 year from the date of the loan closing, then a prior/expired EAC must be obtained.  

Visa Residents 

  • Copy of unexpired VISA and unexpired passport. 
  • If a Visa expires within 1 year from the date of loan closing, then a prior/expired Visa must be obtained. 

ITN Holders 

  • An ITIN is required to be assigned to the consumer prior to application. Verification of the unexpired ITIN is provided by a letter from the IRS confirming the ITIN is assigned to the borrower. * 
  • The borrower is to provide an unexpired passport, Visa, or other government-issued identification with a photo. 
  • No social security number is required.  

Foreign Nationals 

  • No income or U.S. credit is required to qualify. 
  • Assets and reserves are used for approval purposes. 
  • Must have an unexpired Visa and passport. 

Credit & Documentation Obstacles 

A borrower’s interest rate is determined by one’s risk characteristics such as one’s credit score and down payment. For non-permanent residents, these factors can sometimes pose a challenge, since it can take years to establish a good credit history. Fortunately, there are options to help overcome these obstacles. Moreover, you may be able to transfer your credit history from the previous country you were residing in using Nova Credit. If the credit report won’t transfer over from the home country, then a non-permanent resident can provide the following items to qualify for a mortgage.  

  • U.S Social Security Number  
  • Proof of Income 
  • Bank statements 
  • Four credit references with a 2-year history and contact information.   

 

Home Loan Options for Non-Permanent Residents 

FHA

Governed by the Housing of Urban Development (HUD), an FHA loan offers flexible guidelines for borrowers with limited down payment funds and an imperfect credit history. 

  • Flexible use of gift funds and grants for down payment. 
  • Flexible qualifying credit – it’s possible to qualify with a lower credit score. 
  • Upfront mortgage insurance may be financed or paid at the closing table. 

Conventional Loan

Typically viewed as the 20% down mortgage solution, conventional loans come in all shapes and sizes.  

  • Range of down payment options. 
  • Eliminate mortgage insurance with 20% down payment. 
  • Less restrictive property guidelines. 
  • Low on down payment funds? Consider these options: 
  • Fannie Mae HomeReady & Freddie Mac Home Possible 
  • Affordable housing programs that offer borrowers the opportunity to purchase a home with a 3% down payment. 

USDA

Government insured for purchasing within a designated rural area. Designed for low-to-moderate-income borrowers, a USDA loan offers flexible guidelines and no down payment. 

  • No down payment for eligible borrowers in designated rural areas. 
  • No mortgage insurance.
  • No maximum amount the seller can contribute. 

 

Mortgage Resources for Non-Permanent Residents  

Direct Mortgage Loans is proud to provide tools and resources to help bilingual borrowers feel confident during the mortgage process. Here are some of the tools we offer that can help you better understand the home-buying process.  

  • Complete a Spanish inquiry with our desktop application. 
  •  Translate all disclosures in Spanish, with our free Talk’uments services. 
  • Feel confident about the process by working with our licensed Spanish-speaking Loan Officers. 

If you’ve been turned down for a mortgage because of your residence status, then we may be able to help. Access our free Home Buyer Guide to learn more about the mortgage process and contact Direct Mortgage Loans today!