Important questions in regards to financing for Foreign Nationals in Florida

What exactly can a foreign national finance in Florida?

• Single Family House purchase
• Multi Family purchase (1-4 unit multi family property loans are available in select areas)
• Condominium purchase
• New construction
• Refinancing (redemption of an existing loan)
• House/Condominium: "Cash-out"-Refinancing (mortgaging of an unencumbered property with succeeding cash payout of the finance amount)

What is the maximum amount a foreign national can borrow against a real estate property?

Most banks require 30% down

Important: When financing through a US bank, the bank requires an independent, state certified appraiser to determine the value of the property by comparing homes that have closed in the area. The bank then will lend money on the purchase price or appraised value - which ever is less

What are the loan terms in Florida?

• Standard loan is amortized over 30 years; meaning your payments are figured on 360 months even if the rate is not fixed for the full 30 years. Some can have a 15 year amortization.
• Balloons (long-term amortization, medium term duration) , i.e. loan can be amortized over 30 years. You can have a 7 year balloon meaning you pay as a 30 year loan but after 7 years, your balance is due in full.
• On most loans, there are no prepayment penalties, i.e. you can repay the loan partially or in full at any time, whenever your financial planning, liquidity, U.S. dollar rate etc. deems it to be reasonable without any penalties.

How long can a fixed interest rate-period be for foreign national?

• In most cases, Foreign Nationals are offered an ARM, Adjustable Rate Mortgage. This means that you will receive a fixed rate of 1, 3, 5, 7, 10 years depending on the program.
• There are limited programs that also offer a 15 year or a 30 year fixed rate.

What type of documents does a foreign national need for financing in Florida?

In general:

• Credit report from home country (if possible)
• Proof of income (written statement from the tax accountant or employer and pay check stubs)
• 3 references from local banks and/or car loan companies, and/or credit card companies
• Proof of sufficient assets for down payment, closing costs, and reserves ( i.e. 2-3 months bank statements- must verify large deposits)
• Some banks require tax returns from home county

We will be glad to provide you with some sample texts.

How long does the processing of a loan application take for foreign nationals in Florida?

• The timeframe from credit application to closing is approximately 4 - 6 weeks on average (depending on the credit model and on how quickly you can provide your documentation)
• The better you are prepared, the shorter the processing time

Does the borrower have to be present in the USA for the closing ?

• Most of our lenders do not require you to be in the USA at any point. From credit application to closing we can do everything over the phone/fax/or by courier. Although, we do have lenders/investors who require an interview in person.
• In addition, some lenders/investors will require closing documents to be signed by a US Notary either in the US or at the US Embassy from your country.

Can the borrower wait with signing the sales contract until loan approval?

• All financing in Florida is object-based, which means that you need a signed purchase- or construction contract in order to apply for a loan
• Important: Please make sure that the purchase- or construction contract includes a "Finance Contingency" (This finance contingency clause allows you a resignation right in case the financing is not feasible.) Please discuss this clause with your REALTOR or an attorney prior to signing your purchase contract.

Which special features exist with construction mortgages in Florida?

• There is no commitment interest
• You will be offered a one time close mortgage, meaning the bank will finance both the construction and the end loan together
• Supervision and inspection of the construction progress by the bank
• The bank assesses the creditworthiness of the construction company in order to minimize a potential risk of default on the builders side
• The loan amount will be paid out to the construction company in installments and only after specific performance by the contractor and inspections by the bank
• Equity will be consumed before borrowed capital; therefore the loan interest only begins during the advanced construction phases