U.S. Mortgage Guide for International Buyers: Lender Requirements, Challenges, & Israeli Borrower Insights
Buying a home in the United States as a non-U.S. citizen living abroad is possible, but it comes with unique challenges. Whether you are an international investor looking for a rental property in New York City, a vacation home in Miami, or a long-term asset in another U.S. market, understanding the mortgage application process for foreign nationals is critical.
This guide outlines lender requirements, common pitfalls, and practical tips, plus special insights for Israeli buyers navigating the process.
Understanding U.S. Mortgages for Non-Residents
A non-resident foreign national is someone who is not a U.S. citizen, does not have a U.S. green card, and does not primarily reside in the United States.
Many U.S. lenders offer “foreign national loans”, which differ significantly from standard domestic mortgages.
Key facts to know regarding mortgages for non-residents:
- Eligibility: You typically need a valid foreign passport and proof of legal U.S. entry (visa or visa waiver).
- Down payment: Most lenders require a larger down payment, typically between 25% and 40% of the purchase price.
- Loan types: Common options include foreign national mortgage programs and non-qualified mortgages, which rely on foreign income and assets rather than U.S. tax returns.
Lender Requirements for Foreign Nationals
Before you start your U.S. property search, be aware of the mortgage requirements for foreign nationals as well as closing costs, tax implications, and the closing process. While details vary by lender, most will require:
1. Proof of Identity and Residency
- Valid passport from your country of citizenship.
- U.S. visa or visa waiver for property visits or closing attendance.
2. Down Payment & Asset Verification
- High equity expectation: often 30%+ of purchase price.
- Funds typically must be seasoned in a bank account for 60–90 days.
- Some lenders require the down payment to be transferred to a U.S. bank account before closing.
3. Income and Credit Documentation
- U.S. credit score is not always required. Acceptable alternatives include:
- International credit reports.
- Employment verification from a foreign employer.
- Foreign tax returns or accountant letters.
- Bank statements showing consistent income deposits.
4. U.S. Bank Account
- Needed to cover closing costs and set up automatic mortgage payments.
Special Considerations for Israeli Buyers
Israeli buyers are an active segment in the NYC and Florida real estate markets. Your path to financing can be smoother if you work with banks that have strong Israel-U.S. ties. These banks understand Hebrew-language tax returns, pay stubs, and business records, which enables them to audit bank accounts in Israel, thereby facilitating U.S. credit approvals.
Typically, buyers obtain a pre-approval letter from the lender prior to signing the contract of sale and, once the contract is signed, they seek a mortgage commitment from the lender.
Israeli Banks with a U.S. Presence
- IDB Bank (Israel Discount Bank of New York). Offers personal and commercial banking in NYC, with familiarity in reviewing Israeli financial documents.
- BHI (Bank Hapoalim International). U.S. division of Bank Hapoalim, with branches in NY and other states, often serving Israeli entrepreneurs and investors.
- Bank Leumi USA (Now Valley National Bank). Although Bank Leumi’s U.S. operations were acquired by Valley National Bank in 2022, many former Leumi bankers continue to serve Israeli clients and understand the nuances of Israeli financial documentation.
Practical Tips for a Successful Application
- Engage a U.S. real estate attorney and broker early to navigate the process.
- Pre-qualify with multiple lenders as rates and terms can vary widely.
- Prepare translated, certified financial documents well in advance.
- Open a U.S. bank account early to handle funds transfer smoothly.
- Consider currency risks to protect against exchange rate swings.
Final Thoughts
Securing a mortgage in the U.S. as a non-resident international buyer is entirely possible, but it requires careful preparation, the right lender, and professional guidance. For Israelis in particular, leveraging the U.S. presence of Israeli banks can help smooth the process and reduce uncertainty.
If you are considering a property purchase in New York City or elsewhere in the U.S., speak with an attorney experienced in both U.S. real estate law and international transactions to ensure your deal closes efficiently.