California Foreign National Loans - Frequently Asked Questions

If you are a foreign national and this is your first time seeking a foreign national mortgage in California, I am sure you have questions.

Here are some most popular questions posed by foreign nationals who are interested in getting a US mortgage for investment in California real estate.

1. I am interested in investing in California real estate. As a foreign national, what can I do to make the process as smooth as possible?
Answer: The first thing you should do is contact a California-approved mortgage professional to get pre-approved for a foreign national mortgage loan. Most real estate agents will not show you properties until you have provided a pre-approval letter. The pre-approval will tell you your price range, and how much money you will need to deposit in a U.S. bank in order to meet reserve requirements.

2. What types of California properties provide the best investments?
Answer: In general, properties in resort areas tend to hold their value over time. Fortunately, California has a wide variety of resort properties. Whether your definition of resort includes lakefront properties, mountain properties, golf course properties, wine country properties, or properties located near major attractions, there's a place for you in California.

3. What is a foreign national mortgage loan?
Answer: Foreign national mortgage loans offer buyers who meet the legal definition of a bona fide "foreign national" to purchase real estate in the United States.

4. Who is eligible for a foreign national mortgage loan?
Answer: A foreign national is defined as someone who lives in another country and visits the United States for brief periods for business or vacation. In order to be eligible, you have to be a legal resident of another country and live and work there. Foreign national mortgage loans are not intended for non-documented or illegal immigrants.

5. Do I need a green card?
Answer: No, a green card is not required, since these loans are for residents of other countries, not US immigrants. You will need a valid foreign passport, and may need a visa (depending on your country of origin).

6. What if I have a temporary work visa in the U.S.?
Answer: There is another class of mortgages available for those who have temporary work visas. Please contact us for details.

7. Will I be able to get a foreign national loan without a US credit score?
Answer: Many foreign nationals have purchased property in California without having a FICO-based credit score. While most mortgages do require a good FICO credit score, it is possible to use a combination of International credit report, credit letters and amounts deposited in a US bank instead. If you do not have a FICO score, it is best to talk to a foreign national mortgage specialist prior to locating a property.

8. What is the minimum FICO credit score required?
Answer: Most foreign national mortgage programs look for a FICO score of 700 or higher. There are a few programs for applicants with a 660 or higher score, although the reserve requirements may be higher.

9. What are reserve requirements?
Answer: Reserve requirements refer to the amount a foreign national must have in a US bank in order to qualify for a mortgage. The amount of reserves required varies on a case-by-case basis. A good rule of thumb is six months of mortgage payments plus your down payment and closing costs. It may be in your best interests to work with a multi-national bank that has a presence in the United States and your home country in order to facilitate the transfer of funds.

10. How much will I have to pay as a down payment?
Answer: Foreign national mortgage loans require a down payment between 20% and 40%.

11. Do I have to be in California to sign the closing documents?
Answer: Not necessarily. There are provisions and procedures which allow foreign nationals to sign the mortgage paperwork in their country of origin. It usually depends on your country of origin, and whether we have arrangements with a trusted third party to handle the proceedings.

Copyright © 2008 Julie Cline, Preferred Realty Partners LLC.
Julie Cline's network of professionals provides one-stop, all-inclusive services for foreign nationals investing in California real estate. Her network includes mortgage financing, real estate, and property management professionals experienced in the foreign investor market. Julie has 18 years of financial services expertise and is a member of the National Ethics Bureau. For information, call (866) 599- 8480 or visit http://www.preferredrealtypartners.com