It’s legal, and it may be easier than you might expect.
Perhaps you’ve fallen in love with warm, sunny Florida and want to buy a vacation home there. Or maybe you’re thinking about buying a condo in California as an investment property. But if you’re not an American citizen and you live in another country, is it legal to buy a home in the U.S.? What if you live and work in the U.S. with a green card?
Yes, it’s legal in both scenarios—and you may even qualify for a mortgage to purchase your new home. However, before you start scrolling through real estate listings, it’s essential to understand what goes into making a U.S. property purchase as a foreigner.
- Non-citizens buy U.S. property for many reasons, including investment, a place to live or vacation, or asset diversification.
- Many non-citizens buy property in America with cash, although mortgages may be available to qualifying non-citizens.
- A successful transaction depends on getting advice from legal experts in real estate, taxation, and possibly immigration.
Can Non-Citizens Buy Property in the U.S.?
People are often surprised by the answer. It’s legally very easy for foreigners to buy in the U.S., and the U.S. is very generous in many ways.
Residential purchases by foreign buyers added up to $59 billion between April 2021 and March 2022, according to a 2022 report released by the National Association of Realtors. Buyers are often from Canada, Mexico, China, India, Brazil, and Colombia. Florida is a leading destination, along with California, Texas, Arizona, and New York.
Why Do Non-Citizens Buy Property in the U.S.?
Top reasons to buy property in the U.S. often include:
- While living and working in the U.S., a family is looking for a primary or secondary home in a comfortable area with good schools and a welcoming community.
- A wealthy foreign investor is able to take advantage of timing and pricing to buy in areas of the U.S. they feel would be a good investment.
- A global company wants to invest in real estate for employees’ living needs.
- A foreign buyer wants to keep some of their assets in the U.S. to diversify their portfolio.
To learn more about FIRPTA, please feel free to reach out to us. It is the utmost importance that the right team of professionals assist in the process.
We continue to get questions on temporary buy-downs and we came across a tool that gives a picture of what is potentially best for a borrower. Is it better for you to get a Price Reduction, funds for a Temporary Buydown or use funds for a Permanent Buydown?
Here is a scenario of a $400,000 price with 20% down:
The graph below shows the Cost Benefits of each scenario over 10 years.
The Graph below shows the lowest cumulative PITI payments over the course of 10 years.
SUMMARY: The summary of these is that in the short term, the temporary buydown makes the most sense and the permanent buydown wins over the course of time even over the price reduction. Thoughts to consider: If rates come down in the next 6-12 months as we expect, most folks will have an opportunity to refinance the current mortgage. If a borrower is on a temporary buydown and they have the opportunity to refinance, those funds are used to reduce the payoff so the funds are NOT lost. Those funds can essentially be used to pay for the refinance. That said, IF rates do NOT come down then the permanent buydown is the way to go.
CALL US anytime with questions, we would love to chat!
Credit for charts and information goes to True North Mortgage, Jim Roberts
True North Mortgage
505 E Plaza Circle Dr Ste D
Litchfield Park, AZ 85340
Short on funds to pay Uncle Sam on tax day? Well, Freddie Mac said there is a housing shortage of 3.8 MILLION homes which is over and above “normal” demand. With the bump in rates, we do expect inventories to climb a little and appreciation to cool but not start falling. A 3-5% appreciation rate is still appreciation and is a far cry from a drop in prices. Mortgage bonds are trying to hold onto the floor of support they are resting on currently so we are starting this week floating, but not with high levels of confidence. A week and a half ago there were multiple articles from economists talking about the 2.5% yield on the 10 year Treasury being a peak in yield and that we would likely stall and potentially see a drop from that point. That moment was on April 5th. Now, April 18th, the 10 year yield is up to nearly 2.85% and pressing above the resistance of 2.82%. Markets are still in major flux looking for a breather.