Insider Guide to Real Estate Transactions in Florida, ch. 7: Financing

Financing a property purchase – primary residences, second homes, and investment properties – in the US is common: it reduces the equity requirement for the transaction and mortgage interest is tax-deductible. Since the US-mortgage crisis 2006-08, the loan process has become a bit more regulated and lengthy. Note: Financing a business purchase can be challenging for US citizens, and is extremely difficult if not impossible for foreign nationals.

For residential deals, typical Loan-to-Value Ratios (LTV) are 70% – 95% for US-citizens and 50% – 75% for foreign nationals (non-US-applicants), depending on credit history, documentation and income. 100% financing is mostly unheard of in the US.
To qualify for a mortgage, some lenders require that the borrower opens an account with the bank as an additional security or pledges liquid assets (cash-equivalents, commonly traded stocks).

Loan amounts can go as high as $25m for foreign nationals, and considerably higher for US citizens. Loan rates for foreigners are always higher than for US citizens or permanent residents. It pays to comparison-shop – not only because rates vary, but also as some mortgage brokers specialized in foreign nationals extract a substantial rate surcharge for the privilege of doing business, especially if they are located in the borrowers' country of origin and speak their language.

If you happen to be a non-US citizen, make sure your lender is experienced in dealing with foreign nationals, or ask your agent to recommend one. For both US- and non-US-citizens, prudent lender selection will streamline the process considerably.

Time frame: as of late 2022, typical loan approvals for US borrowers take at least three, more likely four to seven weeks, often longer for foreign nationals. For those, a FICO score is mostly not required, and often neither an ITIN, social security number, green card or visa.

Like loan rates, the exact requirements to get a mortgage vary from lender to lender, but for both US- and non-US applicants, thorough and detailed documentation wins the day.