Can I Buy a House if I Am Not a Permanent Resident?

It is possible for individuals who are not permanent residents of the United States to purchase property within the country. While the concept of homeownership in a foreign nation might appear complex, the U.S. legal framework permits non-permanent residents to acquire real estate. This process, however, often involves a more detailed approach and requires specific documentation compared to transactions for U.S. citizens or permanent residents. Understanding the distinct requirements and procedures is a necessary step for navigating the U.S. real estate market successfully.

Eligibility and Basic Requirements

Legal presence in the United States forms the fundamental prerequisite for non-permanent residents seeking to purchase property. This means holding a valid visa status that permits residency, rather than necessarily possessing a green card, which signifies permanent residency. Many types of non-immigrant visas commonly enable property acquisition, including the H-1B visa for specialty occupations, the L-1 visa for intra-company transferees, and the E-series visas for treaty traders and investors. Individuals on H-1B visas, for instance, can reside and work in the U.S., allowing them to secure mortgages, while L-1 visa holders often have extended stays that can lead to permanent residency.

For those without a Social Security Number (SSN), obtaining an Individual Taxpayer Identification Number (ITIN) becomes important for financial transactions, including property purchases. An ITIN is a nine-digit tax processing number issued by the IRS to individuals who are required to have a U.S. taxpayer identification number but are ineligible for an SSN. It is primarily used for federal income tax purposes, and its possession does not alter immigration status or provide work authorization.

The application for an ITIN typically involves completing Form W-7. This can be submitted with a federal tax return, through an IRS-authorized Acceptance Agent, or by appointment at an IRS Taxpayer Assistance Center. This process usually requires providing original identification documents or certified copies to verify foreign status and identity. Processing an ITIN application can take approximately 7 to 11 weeks, depending on the time of year and application method.

Securing Financing as a Non-Permanent Resident

Securing a mortgage often presents the most significant consideration for non-permanent residents aspiring to homeownership in the United States. While conventional loans may be accessible, foreign national loan programs or portfolio loans offered by specialized lenders are frequently utilized. These programs are designed to accommodate the unique financial profiles of international borrowers who may not fit standard lending criteria. Lenders typically evaluate the borrower’s intent for long-term residency, often preferring that the visa holder has at least three years remaining on their authorized stay.

A common challenge for non-permanent residents is the absence of a substantial U.S. credit history. To address this, many lenders will consider international credit reports or alternative forms of credit verification from the applicant’s country of origin. Income verification typically requires more extensive documentation, including employment verification letters from U.S. or international employers, as well as bank statements from both U.S. and foreign accounts to demonstrate financial stability.

Down payment requirements for non-permanent residents are generally higher than those for U.S. citizens, reflecting the perceived increased risk for lenders. Borrowers should anticipate a down payment ranging from 15% to 50% of the property’s purchase price, with many foreign national loan programs commonly requiring 20% to 40% down. Interest rates for mortgages obtained by non-permanent residents can also be somewhat higher, approximately 0.50% to 4% above standard rates, depending on various factors such as market conditions, the loan-to-value ratio, and the borrower’s perceived creditworthiness. Despite these potential differences, competitive rates are available, especially from lenders experienced in working with international clients.

Documentation for mortgage applications is comprehensive and typically includes a valid visa, an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN), and detailed employment history. Lenders often require proof of liquid cash reserves to cover closing costs and several months of mortgage payments. For investment properties, Debt Service Coverage Ratio (DSCR) loans are sometimes an option, where qualification is based on the property’s potential rental income rather than the borrower’s personal income. Understanding the specific requirements of lenders specializing in foreign national loans can streamline the financing process.

Unique Legal and Tax Considerations

Owning property in the U.S. as a non-permanent resident involves distinct legal and tax implications that extend beyond the initial purchase and necessitate careful attention. The Foreign Investment in Real Property Tax Act (FIRPTA) is particularly relevant, imposing a withholding tax on the disposition of U.S. real property interests by foreign persons. When a foreign person sells U.S. real estate, the buyer is generally required to withhold 15% of the gross sales price and remit it to the Internal Revenue Service (IRS). This withholding acts as a prepayment of the foreign seller’s potential U.S. capital gains tax liability, not the final tax.

Certain exceptions and reductions apply to FIRPTA withholding. For instance, if the sales price is $300,000 or less and the buyer intends to use the property as a residence, no withholding may be required. For sales between $300,001 and $1,000,000, the withholding rate can be reduced to 10% if the buyer similarly intends to reside in the property.

All property owners in the U.S., including non-permanent residents, are subject to local property taxes. These taxes are levied by local governmental bodies and are calculated based on the property’s assessed value, which is derived from its fair market value, multiplied by an assessment ratio and the prevailing tax rate or mill levy. Property taxes fund essential local services such as education, public safety, and infrastructure. The specific rates and assessment methods vary significantly by jurisdiction.

A significant tax consideration for non-resident aliens involves U.S. estate tax. Unlike U.S. citizens, who have a substantial estate tax exemption (e.g., $13.99 million for 2025), non-resident aliens are typically granted a much lower exemption of $60,000 for U.S. situs assets, including real property. Any U.S. real estate owned by a non-resident alien exceeding this $60,000 threshold could be subject to federal estate tax, with rates potentially reaching 40%. Given these complexities, consulting with legal and tax professionals specializing in international real estate and tax law is advisable to ensure compliance and proper estate planning.

Navigating the Home Buying Process

The journey of purchasing a home in the United States for a non-permanent resident generally mirrors the process for domestic buyers, albeit with an amplified need for expert guidance. A crucial initial step involves partnering with a real estate agent who has specific experience assisting foreign buyers. Such an agent can offer insights into suitable markets and properties, while also understanding the unique requirements associated with international transactions and local practices relevant to international clients.

After identifying a desirable property, the buyer submits an offer, which, if accepted, forms a binding purchase agreement. This agreement specifies the terms of sale, including the price, contingencies, and closing date. Standard due diligence then follows, typically involving a home inspection to evaluate the property’s condition and an appraisal to confirm its market value for financing purposes.

The final stage is the closing, where ownership of the property is formally transferred. This involves signing a multitude of legal documents, including the deed, mortgage note, and various disclosures. For non-permanent residents, the involvement of a real estate attorney throughout this process is particularly important. An attorney can review all contracts, explain complex legal terms, understand local regulations, and ensure that the transaction complies with all relevant regulations, protecting the buyer’s interests.