How Does a Foreign National With No Credit History Qualify for a Mortgage?

Foreign nationals without credit history can qualify for a mortgage in the United States, though it's easier for those with established credit. This article will cover the actions that foreign nationals can take to improve their chances of qualifying for a mortgage to acquire or refinance a residential property. 

Have a 50% Down Payment

Bank portfolio lenders will give mortgages to foreign nationals without any U.S.-based credit — provided they have a 50% down payment, and can document their ability to repay and service the mortgage debt. 

Establish a Depository Relationship at a Bank

If you don't have any U.S.-based credit and want to purchase a property within the next 12 months, consider establishing a banking account at a bank that offers portfolio mortgages. Money talks, and large deposits are the lifeblood of banks. With enough money on deposit, and a significant deposit base after your 50% down payment, you'll most likely be able to get a mortgage even without any U.S.-based credit.

Have Good Credit in Your Home Country

Some foreign national loan programs, like jumbo and NonQM loans, qualify mortgages using a foreign credit report. With good credit back home, you may qualify for a mortgage in the United States.

Use a Hard Money Bridge Loan to Purchase a Property

If you’re buying an investment property in the United States and don’t have any U.S.-based credit, you could use a hard money bridge loan. Once you’ve purchased the property, you can work on establishing credit in the U.S. by opening revolving accounts at a bank — starting with secured credit cards and lines of credit — followed by an auto loan. Hard money loans do have higher interest rates, but can get you the property you want while you take one to two years to strengthen your ability to qualify for long-term financing. You'll also want to place large deposits in a bank that offers portfolio mortgage loans, giving you a viable exit strategy into long-term financing.  

Conclusion

Not all hope is lost if you're a foreign national with no credit history. You can qualify for a mortgage with some extra effort. It'll take a little more work, a larger down payment, and bigger deposits with a portfolio lender. Or, you can opt for a higher-interest hard money bridge loan until you have the credit history to qualify for 30-year mortgage financing.