MORTGAGE FINANCING FOR INTERNATIONAL BUYERS

At the beginning of my blog post I would like to answer the question why are international buyers interested in Alexandria Virginia Real Estate and Washington DC Real Estate in general.

There are multiple reasons including location(the Nation’s Capitol), quality of life, stable government. Also the value of the US dollar is relative to many other major currencies. The prices of real estate in the DC Metro Area have fallen from 20%-40% from all time highs in 2005. In addition the mortgage interest rates are historic low, there is large international government presence(Embassies, Consulates) and large international organization presence(World Bank, IMF), as well as international student housing demand.

Today I would like to share with my Alexandria real estate blog visitors the only method of financing available to all international buyers and investors in The Greater Capitol Area and all lender requirements. The most critical element is the visa status.

Non permanent resident alien is an alien who is lawfully a resident in the US, as evidenced by a valid work visa, but does not fulfill the requirements of lawful permanent resident alien status. this person is generally eligible for loans on the same terms as a US citizen as long as the borrower has established credit history and income. Employment can be in US or foreign, but needs to be a US source and expected to continue for three years. Acceptable visas are E, H1, L, O, P, and TN. Unacceptable visas are all other H, L, A, B, C, D, F, I, J, K and Q.

Members of International Organizations hold visas G1-G5. These are employees of the World Bank, IMF, OAS and their income is not subject to US taxation and there is no requirement to file a US tax return. They are also eligible to apply for loans but are treated as foreign nationals for Underwriting purposes.

Foreign National is a person under the Visa Waiver that allows citizens of certain selected countries, travelling temporarily to the US under the non-immigrant classes of visitors for pleasure and visitors for business, to enter The US without obtaining an entry visa. Admission is for 90 days. If the real estate investment amount exceeds $729,500, a foreign national is eligible to apply for loan with the following visas:

- Temporary visitors B-1 and B-2 - Trainees H-3 - Journalists/Foreign Media I - Exchange Visitors J-1, J-2 - Religious Workers R-1

Diplomats are also eligible to get financed. Diplomats are considered all ambassadors, foreign government officials, employees and members of their families.

In order to qualify for financing the international buyer must declare a certain income requirements. A Non-US income is not acceptable by Fannie Mae, Freddie Mac and FHA, but it is acceptable by HSBC(Hong Kong Shanghai British Corporation). HSBC can use salaries, self-employed or investment income from foreign sources.

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Generally assets of the investor must be in US depository institution but HSBC accepts foreign denominated assets for qualifying purposes with the condition that bank statements must be verified and translated in English.

Most of US financial institutions require US credit score for mortgage qualifying purposes. For some loan programs, an alternative credit profile can be built using verifications for rent, telephone, utilities.

HSBC Premier Mortgages provide the opportunity to international buyers to obtain financing for a second home, primary residence and the ability to use non-us income, assets and credit for qualifying purposes. The minimum required down payment is 30% of the sales price.