Getting a US mortgage as a newcomer

You do not need to be a U.S. citizen or permanent resident to buy property in the United States. However, lenders will scrutinize your credit history, proof of income, and work authorization before approving a mortgage. Understanding what you need to prepare and which loan programs accept newcomers will help you move confidently through the homebuying process.

Credit, Income, and Work Authorization: What Lenders Check

Mortgage underwriting—the process lenders use to evaluate your loan application—focuses on three core factors: your creditworthiness, your ability to repay, and your legal right to work in the United States.

Credit Score and History

Lenders review your credit score and payment history to assess the risk of lending to you. For conventional mortgages backed by Fannie Mae, most lenders require a minimum credit score of 620, though some prefer 640 or higher. If you are new to the U.S. and have no credit history yet, you may not have a score at all—but that does not automatically disqualify you. Some lenders can work with limited or no U.S. credit history by examining alternative documentation such as rent payment records, utility payments, or international credit reports. If you have derogatory marks—missed payments, collections, bankruptcy, or foreclosure—expect the lender to ask you to explain them in writing.

Proof of Income

Underwriters must verify that you earn enough income to comfortably afford your monthly mortgage payment. The standard documents you will need include recent pay stubs (typically the last two to three months), W-2 forms and tax returns for the previous two years, and current bank statements showing your savings. If your income includes bonuses or commissions, lenders will require two years of history for those. If you are self-employed, expect to provide two years of profit and loss statements, balance sheets, and business tax returns in addition to personal returns. Self-employed borrowers and those with irregular income may face more scrutiny, so early preparation helps.

Work Authorization

To use your income to qualify for a mortgage, lenders must verify that you are legally authorized to work in the United States. If you hold a nonimmigrant visa such as H-1B, L-1, O-1, E-1, E-2, or I visa, bring your current passport, the relevant visa stamp, your I-94 Arrival/Departure Record (which you can print from CBP's website if needed), and your current Form I-797 approval notice. The I-797, issued by U.S. Citizenship and Immigration Services (USCIS), confirms your immigration status and work authorization. If your visa expires within 12 months, lenders may ask for evidence that it will be renewed—an employer letter, a receipt notice for a pending extension petition, or other renewal documentation. Some lenders will not approve the loan if your authorized stay ends before the mortgage closes. If you have an Employment Authorization Document (EAD), bring that as well. Visa holders do not need a green card or a U.S. citizen co-signer to qualify for a conventional mortgage on their own, provided they can document stable income and creditworthiness.

Debt-to-Income Ratio

Underwriters calculate your debt-to-income ratio (DTI) by dividing your total monthly debt payments—mortgage, car loans, credit cards, student loans, child support—by your gross monthly income, then multiplying by 100. For conventional loans, lenders typically prefer a DTI of 36 percent or lower, though some allow up to 43 percent with compensating factors (strong assets, large down payment, or long employment history). For FHA loans, the standard limit is 43 percent DTI, though manual underwriting may be required if yours is higher. Your DTI is crucial: it directly limits the loan amount you can borrow.

Social Security Number, ITIN, and Mortgage Options

U.S. mortgage lenders traditionally require a Social Security Number (SSN), a nine-digit identifier issued by the Social Security Administration. Many newcomers do not yet have an SSN, and some may be ineligible for one. Fortunately, alternative lending programs exist.

What Is an ITIN?

An Individual Taxpayer Identification Number (ITIN) is a tax-processing number issued by the Internal Revenue Service (IRS) to individuals who are ineligible for an SSN but need to file U.S. taxes. ITINs are available to immigrant visa holders, nonresident aliens, dependents and spouses of U.S. citizens, and others. You can apply for an ITIN through the IRS by filing Form W-7 with a tax return or by applying through a local IRS office if you are outside the United States.

ITIN Loans

ITIN loans, also called ITIN mortgages or non-QM (non-qualified) mortgages, are specialized home loans for borrowers who have an ITIN instead of an SSN. These loans are legal and allow you to qualify for homeownership without ever having held a Social Security Number. The lender does not require you to prove legal residency or hold a green card. However, ITIN loans come with important trade-offs: they are less widely available than conventional mortgages, so you will need to search carefully for a lender that offers them; they often carry higher interest rates because lenders perceive borrowers without SSNs as higher risk; and they typically require a larger down payment, usually 15 to 30 percent of the purchase price, depending on the lender. Some ITIN lenders may also require higher credit scores or more extensive documentation than traditional mortgages. Despite these limitations, ITIN loans can help you build U.S. credit history, which is valuable for future financial products.

Getting Pre-Approved Before You House-Hunt

Pre-approval is your first major step. It is a lender's conditional commitment to loan you a specific amount based on a thorough review of your finances. Many newcomers skip this step and search for homes first, only to discover they cannot qualify for enough credit to buy. This wastes time and damages your credibility with sellers.

Why Pre-Approval Matters

Pre-approval tells you exactly how much you can borrow, so you shop in the right price range from the start. More importantly, sellers and real estate agents take pre-approved buyers far more seriously than those without it. In a competitive market, a pre-approval letter strengthens your offer and may be the difference between your bid being accepted or rejected. Pre-approval also surfaces any issues in your financial profile—missing documents, credit problems, or income concerns—while you still have time to address them before you are under contract on a home. Pre-approvals are typically valid for 60 days, so request one when you are seriously ready to buy, not months in advance.

What You Will Need

• Recent pay stubs (last 30 days)
• W-2 forms and tax returns for the previous two years
• Recent bank and investment account statements
• A list of debts and monthly payment amounts
• Photo identification
• If you have an ITIN but no SSN, your ITIN and IRS tax-filing history
• If you are a visa holder, your passport, current visa stamp, I-94, I-797 approval notice, and sometimes an employer letter confirming sponsorship

Be prepared to fill out a detailed mortgage application and answer questions about your employment, assets, and debts. The lender will verify this information by contacting your employer, checking credit bureaus, and reviewing your bank statements. Respond to any follow-up requests quickly and honestly.

Down Payment Requirements

The down payment is the cash you contribute upfront when you close on a home. It affects your loan amount, your interest rate, and whether you will pay mortgage insurance.

Conventional Mortgages

A 20 percent down payment on a conventional mortgage avoids the added cost of mortgage insurance (PMI). However, you can put down less—most conventional lenders accept as little as 3 percent down. If your down payment is below 20 percent, the lender will require you to pay mortgage insurance, which protects the lender if you stop paying. This insurance is added to your monthly payment. The lower your down payment, the higher your monthly cost.

FHA Loans

FHA (Federal Housing Administration) loans are government-backed mortgages that allow much lower down payments, making them popular with first-time buyers and those with limited savings. The minimum down payment is 3.5 percent of the purchase price if your credit score is 580 or higher. If your credit score is between 500 and 579, you must put down at least 10 percent. Unlike conventional mortgages, FHA loans require mortgage insurance regardless of your down payment amount—the insurance is mandatory for at least 11 years. This insurance protects the lender but adds to your monthly cost. FHA borrowers must also meet a debt-to-income ratio limit of 43 percent in most cases. Additionally, you are required to use the home as your primary residence and move in within 60 days of closing. FHA loans are particularly valuable for newcomers with lower credit scores or savings.

The Underwriting Process

After you make an offer on a home and it is accepted, the underwriting process begins. This is where a mortgage underwriter—a specialist employed by the lender—carefully reviews all your documents and makes a final lending decision.

What Underwriters Review

• Your credit report and score
• Two years of W-2s and tax returns to verify income stability
• Recent pay stubs and employment verification
• Bank statements to confirm you have enough cash for the down payment and closing costs
• A list of all debts and monthly obligations to calculate your debt-to-income ratio
• Your work authorization documents (visa, I-94, I-797, EAD)
• A property appraisal to ensure the home's value supports the loan amount

Underwriters may ask you to explain large deposits, gaps in employment, past credit problems, or anything else unusual in your file. This is normal and not cause for alarm. Respond with clear, honest explanations and supporting documents if available.

Conditional Approval and Final Approval

Many borrowers receive conditional approval first, meaning the lender plans to approve the loan once you provide additional requested documents. Common conditions include updated pay stubs, proof that a large deposit is a gift and not a loan, or an explanation letter. After you satisfy all conditions, the underwriter issues final approval. The lender then schedules a closing date, at which point you sign documents, transfer funds, and receive the keys to your new home.

Special Considerations for International Students and Visa Holders

International students on F-1 visas and visa holders on work-based statuses each face unique underwriting challenges.

International Students

Most traditional lenders will not approve a mortgage for an international student on an F-1 visa because students are not expected to remain in the U.S. after graduation and are often not authorized to work off-campus. Some credit unions and specialized lenders may approve ITIN loans for students who can document income and commitment to staying in the U.S. (such as through graduate program enrollment or employment authorization). Consult with a mortgage broker who works with international borrowers, as your options are limited.

H-1B, L-1, and Other Nonimmigrant Visa Holders

Visa holders on employment-based nonimmigrant categories can qualify for conventional mortgages as long as they can document authorized work status and stable income. Lenders will want to see that your visa and work authorization will extend beyond the loan closing date and ideally beyond the first year of the mortgage. If your visa expires within 12 months, provide evidence of a pending renewal—an employer letter confirming they have filed an extension petition, a receipt notice (I-797C) for a pending renewal, or an I-140 approval notice. A pending green card application (I-485) actually strengthens your application because it signals long-term commitment to the U.S. You do not need a green card or U.S. citizen co-signer if you can demonstrate stable employment and income.

Closing Costs and Hidden Expenses

The down payment is just one upfront cost. Closing costs—the fees charged by the lender, title company, and other parties—typically range from 2 to 5 percent of the loan amount. These include origination fees, appraisal fees, credit report fees, title insurance, and property taxes. Ask your lender for a Loan Estimate form within three days of applying; it will break down all costs in detail. With FHA loans, you will also pay an upfront mortgage insurance premium (UFMIP) rolled into the loan amount, plus ongoing monthly mortgage insurance premiums. Budget carefully and do not assume you have enough cash for a down payment without accounting for closing costs.

Common Pitfalls and Red Flags

Another common mistake is moving money between bank accounts shortly before applying for a mortgage. Underwriters must verify the source of your down payment funds; sudden large deposits raise red flags. If you need to transfer money to your U.S. bank account, do so well in advance (at least two months before applying) and keep documentation of the transfer. Similarly, do not change jobs, take on new debt, or make large purchases during the mortgage process. Lenders verify employment and finances multiple times, and major changes can delay or derail approval. If your work visa is expiring soon, do not wait until the last minute to apply for a mortgage; underwriters need time to verify your authorization documents and assess renewal likelihood.

State-Specific Rules

While federal law establishes minimum mortgage standards, many rules governing homeownership are set by individual states. Property taxes vary dramatically by state and affect your monthly housing costs. State laws also regulate security deposits for rental housing, foreclosure procedures, and homestead exemptions (which protect a portion of your home value from creditors). Additionally, some states impose state income tax, which affects your overall tax liability as a homeowner and your ability to deduct mortgage interest. Before buying, research your specific state's homeownership and tax laws, and consult a tax professional or real estate attorney to understand how they apply to your situation.

Next Steps

1. Get a free copy of your credit report from annualcreditreport.com and check it for errors
2. Gather two years of financial documents: W-2s, tax returns, recent pay stubs, and bank statements
3. If you do not have an SSN, apply for an ITIN by filing Form W-7 with the IRS
4. Research mortgage lenders in your state, especially those offering ITIN loans or programs for visa holders
5. Contact multiple lenders and request a pre-approval; compare their Loan Estimates carefully
6. Once pre-approved, work with a real estate agent to begin house-hunting
7. When you make an offer and it is accepted, your lender will guide you through underwriting and closing