Can You Buy a House on an H1B Visa?

Buying a home in the United States is a significant step, and H1B visa holders can achieve this. While their temporary residency status involves specific considerations, H1B visa holders can purchase property like U.S. citizens. This article guides H1B visa holders through the homeownership journey, from eligibility to property management.

Understanding Eligibility

Securing a home loan requires meeting financial criteria to demonstrate repayment ability. Lenders evaluate credit score, debt-to-income (DTI) ratio, and employment stability. A strong credit history, often a FICO score of 670 or higher, improves loan terms and eligibility. Lenders prefer a DTI ratio below 43%, indicating a manageable portion of income for debt payments.

H1B visa status does not prohibit homeownership, but its temporary nature influences lenders. Some lenders require a two-year U.S. credit history, while others offer specialized programs for foreign nationals with limited or no U.S. credit. These programs may consider international credit reports or alternative creditworthiness proof from a visa holder’s home country.

A Social Security Number (SSN) is commonly required for credit building and most mortgage applications, allowing lenders to access credit history. For individuals without an SSN, an Individual Taxpayer Identification Number (ITIN) can be used for tax purposes, and some specialized ITIN mortgage programs exist. ITIN loans may come with higher down payment requirements and interest rates compared to SSN holder loans.

The down payment plays a substantial role in H1B visa holders’ loan eligibility and terms. While U.S. citizens might qualify for down payments as low as 3% to 5% on conventional loans, H1B visa holders often need a higher down payment, ranging from 20% to 30%. A larger down payment can reduce the loan amount, potentially lowering monthly payments and overall interest.

Securing a Mortgage

Conventional loans are a common option for H1B visa holders with a strong U.S. credit history. These loans follow Fannie Mae and Freddie Mac guidelines. H1B status does not directly affect interest rates for qualified borrowers, but the visa’s temporary nature can influence loan terms, especially if expiration is within a year of application.

Lenders may require an employer letter confirming intent to extend the H1B visa if its expiration is approaching. Previously, FHA loans were popular due to lower down payment requirements, but as of May 25, 2025, FHA regulations generally remove eligibility for most H1B visa holders. Specialized foreign national mortgage programs remain an option for those with limited U.S. credit.

H1B visa holders must provide extensive documentation when applying for a mortgage. Documentation includes an unexpired passport, H1B visa, I-94 record, and I-797 approval notices. Lenders also require employment stability proof, such as recent pay stubs, two years of W-2 forms, and an employer verification letter.

Financial documentation is necessary, including two months of bank statements to verify assets for down payment and closing costs. Two years of tax returns are often requested, especially for individuals with complex income structures. Comparing loan offers from various lenders is important to understand differences in interest rates, closing costs, and fees. Mortgage pre-approval is an important initial step, providing a clear understanding of the affordable price range and strengthening offers in a competitive housing market.

Navigating the Purchase Process

Once mortgage pre-approval is secured, the next phase involves searching for and purchasing a home. Engaging an experienced real estate agent who works with international buyers can be beneficial, as they understand H1B visa holders’ specific needs. These agents offer insights into local markets and guide clients through contractual purchase aspects.

The home search involves identifying properties that meet the buyer’s criteria and budget. After finding a suitable home, the real estate agent assists in preparing a competitive offer, including the proposed purchase price, contingencies, and desired closing date. Contingencies, such as home inspection and appraisal, protect the buyer’s interests by allowing further evaluation of the property’s condition and value.

A thorough home inspection is important to uncover potential issues with the property’s structure, systems, or components. This inspection provides an opportunity to negotiate repairs or adjust the offer based on findings. Concurrently, the lender conducts an appraisal to determine the property’s market value, ensuring it aligns with the loan amount and protects their investment.

The final stage is the closing process, where all parties sign legal and financial documents to transfer ownership. This includes reviewing loan documents, the deed, and other legal paperwork. Funds for the down payment and closing costs are transferred, and the buyer receives the keys. Closing costs typically range from 2% to 5% of the loan amount and include origination fees, title insurance, and recording fees.

Immigration Status and Property Ownership

Owning property in the U.S. does not confer direct immigration benefits or alter an H1B visa holder’s nonimmigrant status. The H1B visa remains temporary; its expiration or renewal has implications for residency and mortgage obligations. If H1B status is not renewed or they transition to another visa type, their ability to reside in the U.S. and fulfill mortgage payments may be affected.

If an H1B visa holder’s immigration status changes, such as obtaining a Green Card, property ownership generally continues without issue, as permanent residents have similar rights to citizens. If an individual decides to leave the U.S. permanently, they must consider how to manage their property. Options include selling the home or retaining it as a rental.

Managing property from abroad involves hiring a property management company for tenants, maintenance, and rent collection. If an H1B visa holder becomes a non-resident alien, rental income is U.S.-sourced. They can elect under Internal Revenue Code Section 871 to treat this income as effectively connected with a U.S. trade or business, allowing them to deduct expenses and be taxed on net income.

Upon selling the property as a non-resident alien, the Foreign Investment in Real Property Tax Act (FIRPTA) generally requires a 15% withholding of the gross sales price, remitted to the IRS for capital gains taxes. While H1B visa holders are typically exempt from FIRPTA withholding during active status, they remain liable for capital gains tax upon selling, similar to U.S. citizens.