Dear Andrew,
A mortgage to a non resident is called a Foreign National Mortgage loan. A foreign national who is not a resident of the United States will in many cases seek to own real estate. Financing real estate is generally done by US mortgage companies and banks to United States citizens.
Lenders also offer loans to non citizens. They may be resident aliens, temporary residents or other classifications of either temporary or permanent status.
The best referral source for obtaining a foreign national mortgage loan is a local realtor that works in a location that has a high immigration rate
Some cities that might have a realtor familiar with Foreign National mortgage finance or many Foreign Nationals buying real estate might be Queens, New York, or San Diego, California, etc.
Foreign National Credit Reports
Lenders do prefer a credit report from the home country, although some will take 3 credit reference letters from the borrower. The credit report is much like our own in the U.S. but without scores as their scoring systems are different from our US. There are agencies in the U.S. that obtain the data, conform it to U.S. regulations and provide the background checks (verification of employment, verification of an existence of a company for self employed) and anti-money laundering, anti-terrorism, OFAC and red flag rules...
Secondly, as a additional benefits and make your negotiations stronger, you can also approach the bankers through a realter in your area with your bank statements and also offer to have your rent assinments as additional and collateral security. This wll make the lenders feel safer..
I hope the above helps...
Regards,
Hello,
I have approached my bank in USA and more than 50 other lenders , conventional and unconventional, with no luck at all. I have the full UK credit report ( excellent one) done by Experia ( the same company that does US credit reports). I also have the alternative credit report in USA, through my bank account, as I have been paying bills in USA for almost two years now. There are many people in USA that offer hard money loans/mortgages but most of them are just rip off merchants , who charge advance fees and never give any loan to anyone. I already lost $3000 , although that was dealing with a reputable US Mortgage company but, that is another story
What I am really trying to ask is the following:
1.Are there any conventional lenders in USA that will give me the mortgage I am looking for?
2 Or shall I seek the alternative source of lending and what that source should be?
3 Is there any advantage in setting up the USA based company that will own and manage these proprieties in order to obtain the finance?
4. Finally, is there any way to obtain this finance in UK ( without re mortgaging my house, like transferring the USA proprieties to the UK based company or something similar?
thanks
Andrew
Hello again,
I have been trying so hard to obtain this finance that I have run out of options. I am prepared to pay a generous bonus of $200 for the right answer.
I have already spoken with my US attorney about forming USA based LLC. He told me that it would not be of any advantage to me because the investment propriety has to be minimum 5 family home to be considered as a commercial propriety.
Apparently USA banks will not give LLC company any loans or mortgages based on the real estate owned by LLC, unless the real estate is classified as a commercial propriety!
So even if I transfer the propriety deeds to LLC, my position would not change. Of course this information could be wrong!
In your experience do you know any bank in USA that would lend to LLC for the purchase of the investment propriety?
Or can you direct me to any link and/or website where I can find the useful information and direction?
Thanks
Dear Friend,
I understand that you have been trying so hard. Your US Attorney is primarily correct that forming US Based LLC will not be of any significant advantage because he has rightly said that the investment property has to be minimum 5 family home to be considered as a commercial property. And you shall also find it practically impossible for banks to lend to you as these are not classified as "Commercial" properties.
The investment propriety has to be minimum 5 family home to be considered as a commercial proprerty.
Coming to your main concern, I would suggest you to possible consult your attorney and suggest him changing the constitution of your business. i.e. from LLC to C Corp or at least S Corp.
The main advantage of this would be that it will "corpotarize" your business entity. Foreign / non resident people CAN form such companies. You will be able to do it once you get your ITIN number, etc.
The other obivious advantage will be that of corporatization of your business and your business shall become a separate legal entity and THEREFORE, RAISE THE BORROWING CAPACITY AND WILL ALSO LEND SOME CREDIBILITY IN EYES OF A BANKERS / INVESTORS / LENDERS.
Consult you attorney on these lines. This is a total shift of direction is "Completely a new thought". Consider this.
Secondly, this will open up ALL Options of funding for you. Not only you can have funding through private placements of equity, the Conventional Sources would always get opened up completely. Your business profile suits a Corp and NOT just an LLC.
Financial Advisor
Technical Analyst in Financial Markets -- Experience of more than 10 years in consulting
Is there anything else I can help you with ?
Warm Regards,
Can I form S corp, considering that I am foreign national?
If I form the USA company, LLC or C Corp, do you know of any bank in USA that would lend to such entity?
And the last but not least:
I did not forget about the bonus!
If I managed to obtain the finance based on your advice I will pay $200 bonus as stated previously.
Regards
I asked a follow up question as I sense that you are in for a serious business and your rquirement is genuine.
You being a foreign national, and presuming that you will have no resident US sharesholders, you will have to form a C Corp.
This is because, to qualify for a S Corp, generally, the corporation must have a maximum of 75 shareholders who are individuals. Once a corporation makes the Subchapter S election to be an S-Corporation, profits and losses are passed through the corporation and are reported on the individual tax returns of the respective shareholders of the S-Corporation.
ALL shareholders of the corporation must be U.S. Citizens or have U.S. Residency Status. If, for any reason, shares are somehow sold or transferred to a shareholder who is a foreign national, the corporation will lose its S-Corporation status and be treated as a C-Corporation.
To form a Company by a non-US national, the following would be a very useful resource.
http://www.myuscompany.com/
Once this is done ALL CONVENTIONAL LENDING OPTIONS, I.E. banks, (all leading banks like hsbc, chase, BoA, etc.) and such lending options shall get opened up. This will include all conventional sources you have tried before....