Definition of "Foreign National Loan"

America remains a top tourist attraction worldwide, with over 79 million foreign visitors a year. Many are seduced by the American Dream and sooner or later they wonder how they could become owners of real estate in the US. Although more than 70% of foreign real estate investors had paid in full for their purchases, the remaining buyers have to qualify for a mortgage. And since conventional mortgages are out of their reach, the only option is a foreign national loan, or real estate investment trusts (REIT).

What makes foreign national loans appealing? The fact that there is no age restriction. Individuals may qualify for a 30-year mortgage even if they are 70 years old. Foreign National Loans can be secured by individuals, LLCs, corporations, or offshore companies. The interest rates can be both fixed and adjustable, with amortization periods of 15, 20 and 30 years. Foreign National Loans, also known as ITIN loans, as the borrower must obtain an international tax identification number from the IRS, must be used only for real estate investments, or non-owner occupied properties. They cannot be used to finance a primary residence.

ITIN loans are usually used to buy properties in the US by undocumented immigrants as well as by foreign investors. They have to save at least 20% for a downpayment, but most of them keep up with their monthly payments, and so far defaults have been extremely rare.

Credit unions are more likely to lend money under the provisions of a Foreign National Loan, as they compete against larger banks and online lenders. In the absence of a social security number, they rely on ITINs, driver license, letters from employers and bank statements. ITIN loans are available from a few dozen lenders across the US, such as Illiana Financial, Point West, Guadalupe Credit Union, Latino Community Credit Union, and Alterra Home Loans. All in all, Foreign National Loans are quite easy to obtain and will continue to lure real estate investors both inside the US borders and outside of them.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

An idiomatic expression indicating the desire of an individual to understand new surroundings and all of its nuances including its quality and character. The derivation of the expression ...

Property owned and held jointly and equally shared by each spouse. It is purchased during their marriage, regardless of the wage-earning situation of either spouse. A spouse may not make a ...

Company formed for the purpose of owning securities of one or more real estate corporations and assuming control over their practices and management. The other corporations are generally ...

Day the attachment of property under a judicial order becomes effective. ...

Way to determine the capitalization rate of income property for valuation purposes by weighting the rate of interest and source of financing in percentage terms. ...

English style of architecture characterized by carving and paneling and flattened arches. ...

Molding used in corners simulating a quarter of a circle. ...

Also called "Grey Shell, "Bare Shell," and "Artic Shell," a Cold Shell could be described as the more radical version of a Vanilla Shell. So, what does precisely the Cold Shell definition ...

Charge assessed a mortgagor by the mortgagee when assuming a pre-existing mortgage. The assumption fee is often included in the closing costs when purchasing property. ...

Popular Real Estate Questions