In recent times, Fannie has made significant strides in expanding its underwriting criteria, offering newfound opportunities for foreign nationals to delve into the American dream of homeownership. This expansion allows for more visa types, providing a gateway to FHA or Conventional financing with a minimal 5% down payment. However, navigating the details beyond this point is crucial for prospective buyers.

Understanding FHA Eligibility for Non-Permanent Residents

For those seeking FHA loans, it's imperative to refer to the HUD Mortgagee Letter 2021-12, dated May 28, 2021. This document outlines the eligibility requirements for non-permanent resident borrowers, offering valuable insights into the process.

U.S. Visas: A Path to Residency and Home Ownership

Several U.S. visas confer a form of residency, making the dream of home ownership a reality for many foreign nationals. The possession of a Tax Identification Number (TIN) issued by the IRS, coupled with a valid visa, potentially opens doors to eligibility. However, it's crucial to note that individuals with expired or no visas do not meet the required criteria.

Navigating Institutional Lenders: Challenges and Opportunities

"Institutional lenders" serve as the primary source of home loans for foreign nationals. However, the landscape comes with challenges such as high-interest rates (10%+), substantial down payment demands (40%), and significant loan fees (4-6 points+). These trends are driven by the profit motives of institutional lenders, requiring prospective buyers to carefully assess their financial standing.

Challenges Faced by Foreign Nationals: FICO Scores and Verifiable Income

Foreign nationals encounter two major challenges when aiming for the best interest rates with a low down payment of 5%: FICO scores and verifiable income. Establishing FICO scores can be initiated by applying for at least two "Secured Credit Cards." While few traditional banks offer such cards for TIN holders, numerous online sources cater to individuals irrespective of their immigration status. FICO scores typically become visible after 60 days.

Comprehensive List of Visa Types Allowed by Fannie

For those exploring conventional lending options, a comprehensive list of eligible visa types is essential. Fannie allows various visas, categorized as follows:

Diplomats, Foreign Government Officials, Nationals & Foreign Government Employees Visas:

• A Visa Series (A-1, A-2, A-3)
• E Visa Series (E-1, E-2, E-2S, E-3, E-3S, E-3D, E-3R)
• G Visa Series (G-1, G-2, G-3, G-4, G-5)

Temporary Workers & Professional Employees Visas:

• H Visa Series (H-1B, H-1B1, H-1C, H-4)
• L Visa Series (L-1A, L-1B, L-2, L-2S)

NATO, NAFTA & “Extraordinary Ability” Visas:

• NATO Series (NATO 1-7)
• TN Visa
• O Visa Series (O-1A, O-1B, O-2, O-3)

Other Eligible Visas:

• J-1 Visa
• F-1 Visa
• I, IR1, CR1, CR6, J-2, K-3, K-4, P-1A, P-1B, P-2, P-3, R1, S-1/S-2 (also coded as S-5 and S-6), S-7, T-1, T-2, T-3, T-4, U-1, U-2, U-3, U-4

This information aims to be a valuable guide in navigating the complexities of mortgage eligibility for foreign nationals. As the landscape evolves, staying informed becomes the key to unlocking the doors to homeownership.

12/29/2023