California real estate remains a highly attractive asset class for international investors seeking stability and appreciation. However, non-US citizens living abroad face unique challenges when seeking financing, as they lack US credit scores and domestic income history. Foreign National mortgage programs bridge this gap.
Alternative Underwriting Standards
Foreign National loans are specialized Non-QM products. Instead of US tax returns or FICO scores, lenders typically require a larger down payment (often 30% to 40%) and verify the borrower’s financial strength through international credit reports, reference letters from foreign banks, and proof of liquid reserves.
Structuring the Investment
These loans are generally used for investment properties or second homes, not primary residences. If the property is an investment, lenders often use the DSCR (Debt Service Coverage Ratio) approach, qualifying the loan based on the property’s projected rental income rather than the foreign investor’s personal income, simplifying the cross-border underwriting process.
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