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International Investor

 

The List of Items Needed to to move forward on your loan:
 
Application (See Attached)
Purchase agreement
Last 2 years Fed tax Returns  
Last 2 years W2's
2 most recent pay stubs
Recent 2 months checking & savings statements (All pages of each statement )
Recent 2 months or quarterly retirement statements (All pages of each statement)
Home Owners Insurance statement and agent contact information
Property Tax Statement 
State ID & SS Card (Enlarged Copy)
 
How FHA and VA Loans Affect Your Offer

If you are obtaining a VA or FHA loan in order to finance your purchase, you must include that information in your offer. This is because government loans place additional financial and performance obligations on the seller.

Non-Allowable Fees

First, VA and FHA loans prohibit buyers from paying certain types of fees that are often charged by lenders, escrow companies, settlement agents, and title companies. They are called "non-allowable" fees. They still get charged anyway, but as the buyer, you are "not allowed" to pay them. The result is that the seller ends up paying them instead of you.

Most of these "non-allowable" fees come from your lender. By the time you are making an offer you should have already been pre-qualified by a loan officer, so you or your real estate agent can ask how much the lender’s non-allowable fees will be. Experienced agents should also have an idea of what non-allowable fees will be charged by the escrow or settlement agent and the title insurance company.

Since these are fees the seller would not pay on an offer with conventional financing, this information must be included in your offer. You should also realize that since the seller will be paying these additional fees, they may be a little less negotiable on the price.

Home appraisal inspections on FHA and VA loans are a little more detailed than on conventional loans (and more expensive). The appraisers are required to perform certain minimum inspections as well as evaluate the market value of the property. Although these inspections are not as detailed as a professional home inspection and should not be considered a substitute, sometimes repairs are required.

These are additional costs the seller would not be obligated to pay for someone obtaining conventional financing, so your offer should include a maximum figure for these repairs. Otherwise the seller is signing the equivalent of a blank check, and they do not want to do that.

At the same time, whatever figure you put in will most likely affect the seller’s willingness to negotiate on price. If you put $500 as an estimate, the seller may be $500 less negotiable on their price. If no repairs are required, you may have been able to get the house for $500 less than what you and the seller agreed on as the price. The solution is to add a clause to your offer that goes something like this. "If required repairs cost less than the maximum amount allowed, the excess will be credited toward buyer’s closing costs."

If required repairs cost less than the maximum amount allowed, the excess will be credited toward buyer’s closing costs

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Information below contains information for Citizens and Residents of all Nations and Countries of the World:


Foreign National, Non-U.S. Citizen, Foreigner, International, Global, and Alien Buyers and Sellers who want to Purchase, Buy, Own, Sell, or List For Sale real estate property in the United States of America (USA).

We DON'T make loans and are NOT a private lender, mortgage loan originator, or a bank.
Casa Tua Realty is a Real Estate Brokerage Company that assists persons and organizations with finding properties, Purchases (Buying), and Sales (Selling) Transactions.

A. Federal Government Requirements 


In the United States there are very few restrictions on international real estate investors, buyers, or sellers. The only exceptions concern national security, hostile countries, purchase or control of federal lands, and purchasing a business in a sensitive category.

As an international investor (foreign national) you may take title to real estate in your own name, in the name of a domestic corporation, foreign corporation, a limited partnership, a limited liability company, a joint venture, a real estate investment trust (REIT), or a foreign pension plan.

As a foreign national investor purchasing property in the United States you may acquire, transfer, or be involved in a real estate transaction without the permission or approval from any federal, state, or local governmental entity. You just need to comply with the following three issues.

1. Visitors VISAS & Immigration Laws: Title 8 of the United States Code details all U.S. Immigration Laws. Every non-U.S. citizen who wants or needs to enter the United States must have a VISA. There are over 40 kinds of non-immigrant visas so you should consult an immigration attorney and a U.S. Embassy or Consulate to find out which type of visa is appropriate to your situation.

Most foreign nationals who want to own property or live permanently in the United States commonly use the following types of visas.

B-1 (Business Visitor): This visa allows you, as a foreign citizen, to incorporate in the United States, acquire property, sign contracts, and perform other specific business activities. However, it doesn't permit you to directly manage a U.S. based business or receive U.S. sourced wages (income from employment).

L-1 (Intra-Company Transferee): This visa pertains to foreign individuals who own or work for a foreign corporation that is directly related to a U.S. corporation. It allows you to enter the U.S. if you are employed in an executive, managerial, or special-knowledge capacity for that corporation.

E-1 (Treaty Trader): This visa is available for foreigners from nations that have a trade treaty and commerce with the United States. It permits you, your spouse, and your minor dependants to live in the U.S. for an indefinite number of years.

E-2 (Treaty Investor): This visa allows a foreign person to live in the U.S. while actively investing in, operating, and managing a United States based business.

EB-5 (Million Dollar Investor): This visa is available for non-U.S. citizens who plan to make a capital contribution of $1 million ($1,000,000) or more to a U.S. Based enterprise.

H1-B (Temporary Professional Worker): This visa allows a foreign person with a bachelor's (4-year college or university) degree or higher to remain in the US for up to 6 years while employed in a professional position with a United States employer.

O and P (Extraordinary): These visas are available for aliens of "extraordinary" ability in the sciences, education, business, or athletics to live and work in the United States.

Non-Immigrants (Temporary Residents) who already own real estate property in the United States can enter as short- term visitorsfor a vacation, to study as a full-time student, to conduct special projects, or to be temporarily employed, as well as other reasons. Some types of Visas for Non-Immigrants are B-1 & B-2 (Business Visas), E-1 & E-2 (Treaty Trader & Investor Visas), F-1 (Full-Time Student Visa), L-1 (Inter-Company Transfer Visa), Investment Visas, and the Visa Waiver Pilot Program.


2. Federal Taxation: Non-immigrants or non-residents must pay taxes on the income that they make from their investments in the United States. You are not taxed on income made outside the United States unless you overstay your visit. If you overstay your visit you can become classified as a "Tax Resident" which can result in all of your income from all sources worldwide being subject to U.S. tax. You are considered to be a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year of your visit. Therefore it is essential that you keep track of the number of days spent in the United States each year.

However, there are exemptions to the specific time limits on stays for medical conditions and when you have specific connections to another country. You should consult an accountant (CPA) who specializes in these matters to find out about U.S. taxation law. Information can also be obtained from an immigration attorney or at a U.S. Embassy or Consulate.

Most probably you won't be eligible to receive a U.S. Social Security Number (SSN), which is also a U.S. citizen's Taxpayer Identification Number (TIN). Instead you are required to obtain an Individual Taxpayer Identification Number (ITIN). A ITIN can be issued by the Internal Revenue Service (IRS) or by a Certified Professional Accountant (CPA) approved by the IRS. You will have to fill out a Form W-7 (in English language) or a Form W-7(SP) (in Spanish language) in order to request your ITIN. On the W-7 form you will be required to give a valid reason for your application.

ITIN Guidance for Foreign Property Buyers and Sellers http://www.irs.gov/individuals/article/0,,id=120219,00.html

3. Reporting and Compliance: If you have income from any source in the United States, including real estate, you are required to file a federal income tax return for the year in which your income was received. Also, some states and cities collect income tax and require a return to be filed.

The federal government also requires all foreign buyers of agricultural land to report their purchase within 45 days of closing the transaction.

Real estate agents, brokers, attorneys, and escrow (closing) agents, must report all cash transactions over $10,000 no matter the type of property or reason for the transaction. That includes binder (escrow) deposits and escrow payments. Cash transactions less than $10,000 made at near intervals that add up to more than $10,000 are considered to be one transaction. Therefore, if you pay cash for property, expect that you might be questioned about its source. IRS Form 8300 is used to report cash binders and transactions.

In Florida it is illegal to pay a commission or fee to any person or company that does not have an active real estate license unless there is no licensing law in that person or company's state or country (nation). All payments of referral fees or commissions to bona fide foreign real estate brokers (persons or companies) are subject to a 30% federal withholding tax. You should consult an accountant (CPA) for details.

There are other laws that may pertain to your particular situation so it is always important to consult with the appropriate professionals and government agency officials before entering into a contract to buy or sell real estate in the United States.

B. Transaction Requirements

1. Buying with Cash Brought into the United States: Although cash or its equivalent is almost always acceptable, there can be issues concerning the amount, its transfer into the United States, and how it was obtained.

U.S. law provides that all cash transactions over $10,000 be reported to the federal government. The requirement for reporting involves everyone connected to the transaction including real estate agents and brokers, attorneys (lawyers), title companies, closing agents, and lenders. They may want to know how you earned the money and where it comes from in order to determine that it was legally obtained.

If you finance your real estate or business purchase with a loan from a foreign lender (bank or private) it might be considered a cash transaction because the loan is closed overseas before the property closing. Then the borrowed money is transferred into the United States to be available for the property purchase closing.

  2. Financing and Credit for Foreign Buyers: Foreign buyers of real estate in the United States have the option of taking out a loan to make a real estate purchase. In rising real estate markets and usual economic conditions, there are numerous lenders (banks and mortgage brokers) that will lend money to non-United States citizens to buy real estate. In times of crisis or unusual economic conditions many of these funding sources tighten up and restrict or discontinue such loans. Below are UPDATED guidelines for Foreign Nationals and Resident Aliens


Obtaining a loan for a FN, NPRA, or PRA is not much different than doing a loan for a U.S. citizen…we still require credible documentation for 2-yrs + YTD Income, a credit documentation to demonstrate credit worthiness, and seasoned funds in a known financial institution. Below are the particular issues to look out for to ensure a smooth loan process. The first thing you need to know is what your borrower is classified as:


Permanent Resident Alien: the borrower lives and works in the U.S. and has a Green Card.
Non-Permanent Resident Aliens: the borrower lives and works in the U.S. and is here on a VISA.
Foreign Nationals: The borrower has no Green Card and no VISA.


Foreign Nationals:
- The borrower has no Green Card and no VISA.
- Max 50% LTV; we underwrite as Second Homes; if an investment property, underwriters will consider on a case by case basis.
- Minimum loan amount of $300,000.
- Your Submission File: *IMPORTANT*

It is highly recommend you label each document in your submission, such as A1, A2, B1, C3, etc. Then make a list of all the documents, reference the label, and write a short description of what that document is and why it was submitted. This will greatly enhance the underwriter’s understanding of your file and save a ton of time. Sometimes an underwriter can take hours just trying to figure out what each document is for.

- Credit: No Fico required; Four credit references required – alternate credit from country of origin is okay; international credit reports are also acceptable. If you need alternative forms of credit, then get what you can with the idea that your job is make the underwriter comfortable; that is, you could provide a letter from an employer, bank, or creditor, get utility bills, etc. Your goal is to put the underwriter at ease regarding the borrower’s credit worthiness.

- Income:
--We require 2-years income verification history but it is not necessary to have U.S. tax returns…tax documents from country of origin is okay. If the country of origin does not require the borrower to file the equivalent of tax returns, then we need an employment letter on company letter head explaining compensation. If the employment letter is in a language other than English you need to get a statement from a tax preparer or equivalent who can provide evidence of their credentials by translating the documents…it must be on letterhead so that we can verify the company through 3rd party sources.

- Assets:
--  Must source seasoned assets in a known verifiable worldwide financial institution (i.e., Credit Suisse, HSBC, UBS, Bank of Tokyo)…the funds cannot be in an institution which cannot be verified. The main reason for sourcing the income and assets is for OFAC (Office of Foreign Assets Control) which monitors foreign countries, regimes, known terrorists, etc. In addition, the borrower’s name, employer, and financial institution from the country of origin where the borrower has their funds will be run through an OFAC verification engine to ensure they do not show up…this is done by an underwriter but here is the OFAC website if you would like to check it out. Once the list downloads, search for your borrower’s last name and any AKAs…if nothing comes up, you’re good to go.
- Tax Preparer or Equivalent – Financial Analysis:
--   If the income and asset documentation is in a foreign language, I advise you get an Accountant/CPA (tax preparer or equivalent) to analyze, interpret, convert and present the information in such a way so the Underwriter can easily understand it. That is, have a comprehensive summary and accounting of the borrower’s financial position.
-- Include a business card or letterhead of the tax preparer or CPA so the underwriter can contact if needed.
--  All U.S. Embassies provide translation services.


-Foreign Countries with Credit Reports & Tax Filing Systems include Australia, Britain/UK, Canada, China, France, Iran, Israel, Mexico, Poland, Thailand, South Korea, Asia, Vietnam
-Must have Social Security Number or Tax Identification Number (TIN) which can be easily be acquired through an Accountant/CPA or visit the IRS website that explains what and how to get a TIN. As long as the borrower has applied for the TIN, we can proceed…. (Please note when submitting, most systems require a social security number in order to proceed…in this case, enter 999-99-9999 in order to get the system to move forward).
· Will need a Passport and second form of ID.
· Power of Attorney is not permitted. The borrower will have to go to an American consulate to sign and have loan documents notarized.
· VOM/VOR is required for previous 12 months.
· Pledged Assets is permitted, however, the assets must be in a U.S. bank account.
· Asset Depletion is permitted by exception, however, the assets must be in a U.S. bank account.
· Interest Only is optional.
· Reserves of 12-months full debt service (including all payments, cars, etc.).
· When pricing a Foreign National, there is a specific rate adjustment…. However, you do not need to also adjust for no Fico or second home…these adjustments are built-in to the Foreign National adjustment. All other rate sheet adjustments apply….

Non-Permanent Resident Aliens:
· the borrower lives and works in the U.S. and is here on a VISA (L1, B1, etc. – we don’t accept all VISAs so check with me if not L1 or B1).
· Regular LTV Matrix is available – no specific limitations. However, when income is foreign we typically restrict the LTV to 50% much like a

Foreign National, unless the foreign income is reported on the U.S. tax returns. However, we might be able to raise the LTV slightly depending on the scenario.
· the VISA should be good for another 3 years and if it isn’t then the employer company would need to verify that the VISA will be renewed.
· Link to the State Department’s website information regarding VISAs: http://travel.state.gov/visa/temp/types/types_1271.html#1.
· the borrower must have a Social Security Number.
· the borrower hopefully has U.S. credit but if not, then we’ll need alternative credit.
· Pledged Assets is permitted, however, the assets must be in a U.S. bank account
· Asset Depletion is permitted, however, the assets must be in a U.S. bank account.
· Minimum loan amount of $300,000 up to $5,000,000.
· Interest Only is optional.
· Reserves of 12-months full debt service (including all payments, cars, etc.).
· There are no specific rate or pricing adjustments for a Non-Permanent Resident Alien…regular rate sheet adjustments apply….

Permanent Resident Alien:
· the borrower lives and works in the U.S. and has a Green Card.
· Regular LTV Matrix is available – no specific limitations. However, when income is foreign we typically restrict the LTV to 50% much like a

Foreign National, unless the foreign income is reported on the U.S. tax returns. However, we might be able to raise the LTV slightly depending on the scenario.
· the borrower has U.S. credit and U.S. assets.
· the borrower must have a Social Security Number.
· Pledged Assets is permitted, however, the assets must be in a U.S. bank account
· Asset Depletion is permitted, however, the assets must be in a U.S. bank account.
· Minimum loan amount of $300,000 up to $5,000,000.
· Interest Only is optional.
· Reserves of 12-months full debt service (including all payments, cars, etc.).
· There are no specific rate or pricing adjustments for a Permanent Resident Alien…regular rate sheet adjustments apply….



DISCLAIMER:
Information presented on this website and this page concerning foreign citizen real estate transactions has been gathered from various sources. It is deemed to be reliable but not guaranteed and should be verified by personal due diligence and research with the appropriate government officials, immigration and real estate attorneys (lawyers), and tax accountants (CPA's).

Official United States Government information about visiting, immigration, visas, transferring money, and taxation can be found at the following sites:

http://www.uscis.gov/portal/site/uscis
http://www.dhs.gov/xtrvlsec/crossingborders/
http://www.dhs.gov/files/immigration.shtm
http://www.irs.gov/

Live and Work in Florida

We can help you get info on a VISA Qualifying Business in Florida. There are hundreds of businesses for sale in Florida. It's a Buyer's Market with very advantageous exchange rates between the U.S. Dollar and many other currencies.

Visit houselogic.com for more articles like this.

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