A Foreigner’s Hurdles to Buying a Home in the U.S.

Immigrants and foreign workers in the U.S. had a breath of fresh air when President Joe Biden was officially inaugurated. For them, it means more freedom to live and work in the country. The Biden administration showed intent to lift Trump’s anti-immigration policies, after all.

But despite Biden’s actions so far, activists say that the president must do more to prove his commitment to a meaningful change. With the extension of the proclamations 10014 and 10052, the ban on immigrant and non-immigrant visa holders in the country, anxiety is still widespread. As such, many non-citizens may still find it hard to buy or rent real estate in the U.S.

Generally speaking, though, many lenders are willing to offer the best mortgage loan rates to non-citizens. What if you don’t have a credit history in the U.S. yet? Not a problem, because many lenders will still extend credit to you. You may even qualify for government-issued mortgages, which require a lower down payment.

Overall, non-citizens can definitely own a home in the U.S., but it will take more work — and overcoming challenges. That said, here are the hurdles you may face when buying a home:

1. Documentation Challenges

The main hurdle to getting a mortgage as a non-citizen is proving that you fit the risk profile. Though many lenders are willing to give you a loan, you still have to present proof of your employment and income. This is where it’s more advantageous to be a citizen. Americans only need to show their W-2 forms and tax returns to lenders.

If you haven’t been in the U.S. for long, or don’t live in the U.S. most of the time, it can be tricky to prove your creditworthiness. Just because you may find a good lender doesn’t mean you can skip this step. But of course, there’s a way around it.

Create an account with an international bank that has U.S. branches. Bank statements will allow you to show your income records to a lender. As a result, lenders may become more willing to take a bet on you, even if you don’t have an American credit report.

Some lenders may also order international credit reports in place of a credit report from the three major U.S. credit bureaus. But this process is generally an option only for residents of Canada, the UK, and Ireland.

2. Your Residency Status

Your residency status is a major factor in determining your requirements. Most borrowers are either:

  • Green cardholders
  • Non-permanent residents with a working visa
  • Foreigners with a primary residence outside the U.S.

It’s easier to get a mortgage if your residency status is one of the first two. Prominent mortgage companies usually have the same guidelines for both green cardholder and non-permanent resident borrowers. However, you’ll have a longer list of requirements if you’re a non-permanent resident. Foreign nationals, on the other hand, may appear too risky of a borrower, so lenders tend to require a bigger down payment for them.

beautiful beige house

3. Lack of Affordable Housing

Chances are you’ll rent a place first before shopping for your own home in the U.S. But the monthly rent, upfront deposit, and insurance costs pose great obstacles. You’ll barely be able to pay for those if you haven’t got a job waiting for you in the U.S. yet.

You may also be unaware of the rules and regulations regarding the rental sector. In addition, some private landlords may increase your rent or add more administrative conditions to your contract. This leads many immigrants to resort to illegal renting, pr to settle for poor housing conditions.

4. Substandard Housing

Before you can afford to buy a house, chances are you’ll put up with a substandard dwelling. These houses are usually plagued with maintenance and sanitary issues. They’re also far away from essential services such as healthcare, retail stores, and public transportation.

5. Landlords Exploiting Non-citizens and Immigrants

Non-citizens and immigrants are prone to discrimination by landlords. Aside from increasing your rent, a landlord may also deny you rights to maintenance and repairs. If you call them out, they may threaten to report you to authorities. When you experience this, stand your ground and correct your landlord. The law actually forbids them from discriminating against and threatening their tenants. They are also not allowed to increase rents unjustly.

Times may be better in the U.S. now, but non-citizens and immigrants continue to experience discrimination. Your success in the country doesn’t guarantee that you can buy a home easier either. But if you find a good lender, you can significantly reduce the hurdles. Every challenge you’ll tackle will be worth it once you get the keys to your first home.

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