Utah Mortgage Loans for Permanent Resident & Non-Resident Aliens

People from around the world choose to immigrate to the U.S. each year, and a sizeable number of both documented and undocumented immigrants choose to settle in Utah. If you are an immigrant living in Utah, you might think that homeownership is a dream you won’t be able to realize. However, people with all types of immigration statuses can buy homes.

The Migration Policy Institute reports that out of the 84,000 foreign nationals without documentation living in Utah in 2019, 37% (33,000) were homeowners. Research from Illinois Wesleyan University found that 36.16% of immigrants overall in the U.S. were purchasing homes with mortgages, including both documented and undocumented immigrants.

This data demonstrates that it is possible for you to purchase a home in Utah and to possibly do so with a mortgage even if you are not a U.S. citizen. While there might be some additional obstacles you might need to overcome, the mortgage experts at City Creek Mortgage can help you understand your options. Here’s a guide to getting a mortgage as an immigrant living in Utah.

Immigration Status and its Impact on Mortgage Eligibility

Your immigration status can affect your ability to secure a mortgage, depending on the type of mortgage you might consider. Immigration statuses for non-U.S. citizens living in Utah include:

• Permanent resident alien/lawful permanent resident – People who have secured a visa as a U.S. permanent resident, a Social Security number, and a green card authorizing them to work and live in the U.S. permanently.
• Non-permanent resident alien – People living in Utah without a green card but who have a Social Security number and have any of several different types of visas (H-1B, E visas, etc.). These people are typically here for employment purposes for positions that could last several years and hold Employment Authorization Documents (EADs).
• Refugees and Asylum Grantees – These are people who have been granted legal status because of dangerous conditions in their home countries and have EADs and Social Security numbers. They might be eligible for mortgages based on their financial circumstances and specific immigration statuses.
• DACA recipients – These are individuals who were brought to the U.S. as children and have received protection under the Deferred Action for Childhood Arrivals (DACA) program against removal from the U.S. DACA recipients have Social Security numbers and employment authorization documents while they remain in the U.S. under the protection of the program and continue meeting eligibility criteria.
• Foreign nationals – This category includes people whose primary residence is in a country other than the U.S. and those who are present in Utah without legal authorization. Unauthorized immigrants living in Utah will have the most difficult time securing a mortgage, but it is not impossible.

In general, you’ll have more options for getting a mortgage if you are a permanent resident alien, a non-permanent resident alien, or a DACA recipient with a work visa than if you are a foreign national. Fannie Mae and Freddie Mac, which are the major entities that purchase conventional mortgages on the secondary market, accept mortgages extended to people who hold green cards and work visas.

Since foreign nationals don’t meet the guidelines established by Fannie Mae and Freddie Mac, lenders can’t approve them for conventional mortgages. However, lenders can choose to extend mortgages to foreign nationals and carry the loans themselves. Since doing this does come with significantly more risk, lenders that provide mortgage loans to foreign nationals without work visas or green cards are much likelier to require substantial down payments and charge higher rates of interest.

Mortgage Options for Permanent Residents and Work Visa Holders

If you are a lawful permanent resident, non-permanent resident alien, asylee or refugee, or a DACA recipient and have a Social Security number and a work visa or EAD, you have a few mortgage options.

Let’s take a look at the most popular choices for immigrants wanting to buy homes with mortgages in Utah.

Conventional Mortgages

According to Fannie Mae’s selling guidelines, lenders can consider applicants to be legally present and eligible for conventional mortgages as long as they meet the following criteria:

• Have a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
• Have a current, valid status as shown by a green card, work visa, or EAD
• Can show continuity of income
• Meets other eligibility criteria required of all borrowers

Once you present documents to show you are legally present, the lender can begin the mortgage application process. From that point, you will undergo a similar underwriting process as what U.S. citizen borrowers complete when getting a conventional mortgage, including demonstrating that you can afford the mortgage and have a decent credit history.

With a conventional mortgage, you can buy a single-family home, townhouse, or condominium. However, if you are a non-permanent resident, you won’t be able to get a conventional mortgage to purchase a vacation or investment property.

It’s up to the lender’s discretion whether to approve your mortgage application and verify your legal status in the U.S. In many cases, lenders will want you to have at least three years of continuing income and residence and meet credit requirements before they approve a mortgage application from a non-permanent resident alien.

Special requirements: Conventional loans (Fannie Mae and Freddie Mac)

FHA-Backed Mortgages

Another option for non-permanent resident aliens, permanent resident aliens, DACA recipients, and others with work visas is a mortgage guaranteed by the Federal Housing Administration (FHA). The FHA provides mortgage insurance to guarantee the mortgages lenders approve but does not directly lend money to borrowers. FHA mortgage insurance reduces the lender’s risk of buyer default and loosens borrower eligibility requirements.

FHA mortgages have lower down payment and credit requirements than conventional mortgages. For example, you might be able to buy a home with an FHA mortgage with as little as 3.5% down and a credit score of as low as 580.

The FHA has similar guidelines for non-citizen borrowers as the guidelines previously described for Fannie Mae, including having an SSN or ITIN, having a work visa, EAD, or green card, and showing continuity of income and residence.

Your work visa or EAD must be valid for a minimum of one year after the expected closing date of your mortgage. Alternatively, you can present evidence that your visa or EAD has been renewed before. If your EAD or work visa will expire within 12 months, your lender will need to get proof of renewal from the U.S. Citizenship and Immigration Services (USCIS) or your employer.

Jumbo Loans

If you want to purchase a home that exceeds the conforming loan limits for your Utah county, you might consider a jumbo loan. To be approved for a jumbo loan as a non-U.S. citizen, you will need to show that you have lived in the U.S. for a minimum of five years and that your employment will continue for a minimum of the next three years.

You must intend to live in the home as your primary residence, and it should be a single-family home or a condominium. You will need to make a downpayment of a minimum of 30%.

To prove your legal status, you’ll need to present your EAD, I-140, your valid passport showing a current stamped visa, and your work visa.

Eligibility for a Mortgage as a Permanent or Non-Permanent Resident Alien

In addition to meeting the previously listed criteria, you’ll also need to meet the lender’s criteria to be approved for a mortgage.

The lender will need to verify your residency and its duration, your income, and your credit.

Length of Residency

A lender will want to see that you have been lawfully present in the U.S. for at least three years. You’ll need to show that you have held your green card or work visa for at least 36 months to meet this requirement.

Income Proof

Lenders will want to verify that you have a continuous and steady income that has existed for at least two years. You’ll also need to show lenders documents that you have enough money on hand to make your down payment and pay the closing costs you’ll be responsible for paying. If your bank accounts and other assets are held overseas, you’ll need to have your income and bank account documents translated into English.

Credit Requirements

A hurdle for some people is not having enough credit history in the U.S. However, you can still obtain a credit report if you have a credit card, auto loan, or personal credit line for 12 or more months. You’ll need to have a credit history showing your payments from at least two to three accounts for a year or longer for a credit report and score to be generated.

Common Documentation Hurdles

The biggest hurdle non-citizens face in obtaining a mortgage is being able to prove their employment, credit, and income history. While citizens typically don’t have much trouble since they have been established in the U.S. and have W-2s, income tax returns, and address histories to back them up, non-citizens might have more trouble.

Even if you don’t have a credit report from each of the three major U.S. credit reporting agencies (Equifax, Experian, and TransUnion), you might be able to demonstrate your creditworthiness if you have a longstanding relationship with an international bank that has U.S. branches. Since the bank will already know about your finances, it might be willing to extend a mortgage to you.

Another option is that some lenders will work with international credit reports. According to Experian, this might be an option if you originate from an E.U. country, Canada, the U.K., Australia, Ireland, Australia, Brazil, Mexico, or India.

If you haven’t worked for a long period in the U.S., you might want to consider an FHA-backed mortgage. The U.S. Department of Housing and Urban Development (HUD) will accept documentation of foreign employment if the U.S. tax returns are not available.

Information for Getting a Mortgage if You Are Undocumented

If you are a foreign national living in Utah without legal authorization, you won’t be able to get a mortgage through traditional sources such as conventional mortgages backed by Fannie Mae or Freddie Mac, FHA loans, and others. However, if you obtain an ITIN, you might be able to get approved for a mortgage through a private lender.

An ITIN is a special taxpayer identification number issued by the Internal Revenue Service (IRS) and used to process income tax returns and payments for people who don’t qualify for SSNs.

Banks and other private lenders often provide these types of mortgages to foreign nationals who want to purchase investment properties or vacation homes. However, you might be able to get approved for one for a primary residence.

You’ll need to take the following steps:

1. Apply for an ITIN

You’ll need to start by getting an ITIN. To do this, you can complete the Form W-7 and submit it together with proof of your identity and your foreign status by mail to the IRS at the following address:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

Alternatively, you can go to your local IRS Taxpayer Assistance Center to apply for an ITIN in person or apply for one in person with an IRS-authorized agent.

2. Save Up for a Down Payment

As a foreign national, you likely will not qualify for a government-backed loan or a conventional mortgage with a low down payment. You should anticipate a lender requiring you to make a down payment of 30% to get a mortgage. For this reason, begin saving money as early as possible.

3. Gather Documentation

Once you have your down payment saved and have gotten an ITIN, you’ll need to gather documents to qualify for a private mortgage. Gather the following documents:

• Income proof (tax returns, recent pay stubs, wage statements, audited business financial statements, etc.)
• Credit history information, including information about your loans, credit accounts, and debts
• Bank account statements
• Valid and current government-issued identity documents (passport, driver’s license, etc.)
• Proof of residence (lease, utility bills in your name, etc.)
• Employment or self-employment proof

While the pathway to homeownership can be more challenging for undocumented immigrants, it’s still possible to get a mortgage. You’ll need to plan carefully and be prepared to save a sizeable down payment. Be prepared to pay higher interest rates.

Talk to City Creek Mortgage

Homeownership is not out of the question for immigrants in Utah. Whether you have legal status or are present without lawful status, it still might be possible for you to purchase a home. To learn more about your options and the steps to take, talk to the mortgage experts at City Creek Mortgage today by calling (801) 501-7950,