Buying a Second Home in the U.S. as a Foreign National: What You Need to Know

The United States continues to be one of the most desirable places in the world to own property. For foreign nationals, purchasing a second home here can be both a lifestyle choice and a smart investment. Whether you dream of a vacation property in Florida, a ski retreat in Colorado, or an urban getaway in New York, understanding the process is essential before you buy.

Can Foreign Nationals Buy a Second Home in the U.S.?

Yes. The U.S. does not place restrictions on foreign nationals purchasing real estate. You can buy property in your own name or through a legal entity (such as an LLC), and you don’t need to be a U.S. citizen or permanent resident. However, financing, taxes, and documentation requirements are different than they are for U.S. citizens.

Financing Options for Foreign Nationals

While some buyers pay cash, many foreign nationals choose mortgage financing. Mortgage options for foreign nationals do exist, but the requirements are typically stricter:

• Down Payment – Expect to put down 25%–40% of the purchase price.

• Credit History – U.S. credit history is not always required. Lenders may accept international credit reports, bank references, or proof of assets.

• Income Verification – Tax returns, pay stubs, or CPA letters may be requested. Documentation must often be translated into English.

• Loan Programs – Some banks and mortgage companies offer specialized "Foreign National Loan Programs" designed specifically for these purchases.

  
  

Working with a lender like CMI Financial Group Ltd. is experienced in foreign national mortgages and is key to navigating the process.

Taxes and Legal Considerations

Owning a second home in the U.S. also comes with tax responsibilities:

• Property Taxes – Paid annually to the state and local government.

• Rental Income Tax – If you rent out your second home, you’ll need to report and pay U.S. income taxes.

• Capital Gains Tax – If you sell the property later, you may owe taxes on any profit.

• FIRPTA Withholding – When a foreign national sells U.S. property, the IRS requires withholding a portion of the sale price (currently 15%) to ensure taxes are collected.

  
  

It’s wise to consult with a U.S.-based tax advisor before purchasing to fully understand your obligations.

Benefits of Owning a U.S. Second Home

• Diversification of Assets – U.S. real estate can be a stable long-term investment.

• Vacation Lifestyle – A place to enjoy with family and friends, with the option to rent it out when you’re not using it.

• Strong Market Demand – In popular areas, property values have historically appreciated over time.

  
  

Tips for a Smooth Purchase

1. Work with Local Experts – Choose a real estate agent, mortgage lender, and attorney who specialize in foreign national transactions.

2. Plan for Currency Exchange – Exchange rates can affect your purchase price and loan payments.

3. Understand Ongoing Costs – Beyond the mortgage, budget for property taxes, insurance, HOA fees, and maintenance.

4. Start Early with Financing – Mortgage approvals can take longer for international buyers due to additional documentation.

Final Thoughts

Buying a second home in the U.S. as a foreign national is possible—and for many, it’s a rewarding experience. With the right guidance and preparation, you can secure a vacation property or investment home that fits your goals.

If you’re a foreign national interested in exploring U.S. second home financing options, our team is here to help. We specialize in mortgage solutions tailored for international buyers and would be happy to guide you through every step of the process.