The Financing Challenge for International Buyers
While U.S. law allows non-citizens to own property freely, securing a mortgage is far from simple. Foreign nationals—those without U.S. citizenship or permanent residency—often lack a domestic credit history, earn income abroad, and may only hold an ITIN instead of a Social Security number.
These factors disqualify them from conventional loans backed by Fannie Mae, Freddie Mac, or FHA, leaving a critical gap in the market.
Enter Non-QM Loans: A Tailored Solution
To meet this need, specialized Non-Qualified Mortgage (Non-QM) loans have become the go-to option. Designed specifically for international buyers, these loans use alternative underwriting criteria.
Lenders evaluate risk through international credit reports, foreign bank statements, CPA-verified income letters, and asset documentation from overseas accounts—offering a realistic path to property ownership where traditional lenders cannot.
Higher Costs, But Critical Access
These loans typically require 20% to 40% down payments and carry interest rates 200–400 basis points higher than standard mortgages.
While more expensive, they remain the only viable financing route for many global investors and residents seeking to buy in California. For high-net-worth individuals or those planning long-term stays, the trade-off is often worth the stability and opportunity U.S. real estate provides.
Why California Depends on Foreign Investment
California isn’t just popular—it’s pivotal.
The state captures 15% of all foreign residential purchases in the U.S., leading the nation in international buyer activity. Chinese investors alone represent 36% of foreign homebuyers in the state, drawn by top-tier schools, tech hubs, and lifestyle appeal.
Without accessible financing like foreign national loans, this demand would sharply decline, cooling markets from the Bay Area to Orange County and reducing billions in economic activity.
More Than Mortgages—A Market Multiplier
Foreign national lending fuels more than just home sales. It supports real estate agents, title companies, contractors, and local governments through property taxes.
In high-demand coastal cities, international buyers often purchase move-up or luxury homes, freeing up inventory for domestic buyers. In this way, these loans help sustain housing liquidity and price stability across the state.
Partner with Experts Who Understand Global Buyers
Navigating foreign national loans requires a lender experienced in cross-border finance, compliance, and documentation.
At Capital Direct Funding, we specialize in structuring flexible,compliant Non-QM loans for international clients—making California real estate dreams achievable, even without a U.S. credit file.
Call us today at (626) 796-1680 or visit us at capitaldf.com
Sources: Foreign National Real Estate Financing Analysis – California (2025) ; National Association of REALTORS® – International Transactions in U.S. Residential Real Estate (2025)