Foreign Nationals have had a difficult time finding financing to purchase homes in California. But over the past few months some Portfolio lenders have begun to offer home loans for this "niche". While this is truly a "niche" and does require a large down payment, the Jumbo underwriting guidelines in California are very flexible.
Great Program for Coastal Areas like Newport Beach & Laguna Beach
A Foreign National is considered to be someone who visits the United States for short periods of time but is a legal resident of another country. Citizens of Canada, along with European and Asian countries are quickly figuring out that there are great deals on luxury properties in coastal town and cities of Orange and Los Angeles Counties. The cities of Newport Beach and Laguna Beach are seeing increased interest in real estate by Foreign Nationals.
Foreign National Loan Program Guidelines
Below are a few of the pertinent things to know about the financing options available for Foreign Nationals.
- Typically 50% is the max loan to value, although exceptions are possible on a case by case basis.
- No FICO score is required.
- Foreign income and assets can be used in qualifying.
- Second Home are allowed.
- Vesting is allowed in Trusts, Corporations, LLC's, and Partnerships.
- Non-Permanent Residents Aliens are allowed.
- Flexible underwriting. For example, the lender will use "Asset Depletion", which helps to boost the borrowers income used for qualifying. The lender will amortize the borrowers liquid assets over 30 years (this can be less depending on age of borrower) using a 5% return.
- Pledged Assets are allowed to help lower the amount of the down payment. This helps keep the 50% down payment guidelines from hurting too much. The borrower can keep their Assets with their current accounts. Transferring assets is not required.
Loan Parameters for Foreign National Home Buyers
The loan amount can be between $300,000 and $5,000,000, but on a case by case basis it's possible to go as high as $10,000,000. The loan programs offered tend to be 3, 5, and 7 year Adjustable Rate Mortgages. With these types of programs the interest rate is fixed for the first 3, 5, or 7 years before adjusting semi-annually based on a fixed margin over an adjusting index. ARM mortgage rates in California have remained low through the first quarter of 2011.
Authored by Tim Storm, an Orange County, CA Loan Officer with 22 year experience closing loans- Please contact my office at Home Point Financial for more information about an Orange County, CA home loan. 949-829-1846. MLO#223456
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949-829-1846 | tstorm (at) ochomebuyerloans.com