DSCR Loans for Foreign Nationals: How Non-US Citizens Can Finance US Rental Properties

You don't need a green card or US citizenship to buy rental property in America. DSCR loans are one of the few mortgage products that work for foreign nationals because they focus on the property's rental income, not your visa status or US credit history.

As of 2026, approximately 30-40% of DSCR lenders work with foreign nationals. The catch: you'll pay higher rates and larger down payments than US citizens. But the opportunity is real—foreign investors own an estimated $3.4 billion in US residential real estate, and DSCR loans are how most of them finance it.

What Qualifies You as a Foreign National

For DSCR loan purposes, you're a foreign national if you:

• Live outside the United States
• Hold a non-immigrant visa (B1/B2 tourist, H1-B work, E-2 investor, etc.)
• Don't have a Social Security Number (SSN)
• Have no US credit history

Even if you live in the US on a work visa, many lenders treat you as a foreign national until you get a green card or citizenship.

You don't need:

• US citizenship
• Green card (permanent resident status)
• US credit history
• US employment
• Social Security Number

You do need:

• Valid passport from your home country
• ITIN (Individual Taxpayer Identification Number) or willingness to get one
• Down payment funds (30-50% typically)
• Property with rental income

ITIN: The Key to Getting a DSCR Loan

What Is an ITIN?

An ITIN is a tax identification number issued by the IRS for people who need to file US taxes but don't qualify for a Social Security Number. It's a 9-digit number formatted like an SSN: 9XX-XX-XXXX.

How to Get an ITIN

Option 1: Form W-7 with tax return

1. Complete Form W-7 (Application for ITIN)
2. Attach a valid US tax return (Form 1040)
3. Include certified copies of passport and visa
4. Mail to IRS or submit through Certifying Acceptance Agent (CAA)
5. Wait 7-11 weeks for ITIN letter

Option 2: CAA (Faster, easier) Certifying Acceptance Agents are IRS-authorized professionals who verify your documents and submit your ITIN application. They can authenticate your passport, so you don't have to mail the original to the IRS.

Cost: $50-300 depending on the CAA Processing time: 4-8 weeks

Option 3: Apply when you file your first US tax return After buying your rental property, you'll need to file a US tax return to report rental income. You can apply for the ITIN simultaneously.

Many foreign national DSCR lenders will approve your loan before you have an ITIN, as long as you agree to obtain one before closing.

DSCR Loan Requirements for Foreign Nationals

Down Payment

Expect to put down 30-50%:

• 30-35% down: Common for strong DSCR ratios (1.3+), established country ties, and lower loan amounts
• 40% down: Standard for most foreign national DSCR loans
• 50% down: Required for some lenders, or for properties with marginal rental income (1.0-1.1 DSCR)

Compare this to 20-25% down for US citizens on the same DSCR loan program.

DSCR Ratio

Minimum DSCR is typically 1.1-1.2 for foreign nationals, compared to 1.0 for US borrowers. The property's monthly rental income must be 110-120% of the monthly payment (principal, interest, taxes, insurance, HOA).

Example:

• Monthly rent: $2,500
• Monthly payment: $2,100
• DSCR: 2,500 ÷ 2,100 = 1.19 ✓ (qualifies)

Documentation Requirements

Identity and residency:

• Valid passport (certified copy or original)
• Visa documentation (if you're in the US)
• Proof of home country address (utility bill, bank statement)
• Proof of funds in your home country

Financial documents:

• Bank statements from your home country (2-6 months, translated to English)
• Proof of down payment funds and reserves
• Explanation of source of funds (employment, business, savings, sale of assets)

Property documents:

• Executed lease agreement or market rent analysis
• Appraisal
• Insurance quote (foreign nationals often pay 20-40% more for insurance)

Tax documents:

• ITIN or ITIN application confirmation
• Home country tax returns (sometimes required, especially for larger loans)

Interest Rates and Costs

As of February 2026, foreign national DSCR loan rates are roughly 1-2% higher than rates for US citizens:

US citizen DSCR rates: 7.0-8.5% Foreign national DSCR rates: 8.5-10.5%

The exact rate depends on:

• Down payment: 50% down gets better rates than 30% down
• DSCR ratio: 1.5 beats 1.1
• Loan amount: Under $500K often gets better pricing
• Property type: Single-family is easier than condo or multifamily
• Your country: Some lenders prefer certain countries (Canada, UK, Australia, China) over others

Fees

• Origination fee: 1-3% of loan amount (higher than US citizen loans)
• Appraisal: $400-700
• ITIN application: $50-300 (if using CAA)
• Document translation: $100-500 if your bank statements aren't in English
• Title and escrow: Standard
• Foreign wire fees: $30-100 to transfer down payment from overseas

Budget an extra $2,000-5,000 in fees compared to a standard DSCR loan.

How Foreign Nationals Can Improve Their Approval Odds

1. Increase Your Down Payment

Every 5% of additional down payment reduces risk for the lender. If you're borderline on approval, going from 30% to 40% down can make the difference.

2. Target States with Strong Landlord Laws

Lenders prefer states where evictions are fast and tenant laws favor landlords:

• Florida: 30-40 days to evict
• Georgia: 30-45 days
• Texas: 30-50 days
• Arizona: 30-50 days

Avoid states with tenant-friendly laws and long eviction timelines:

• California: 90-180 days
• New York: 90-150 days
• New Jersey: 60-120 days

3. Choose Properties with Strong Rental Demand

Lenders like properties in markets with:

• Low vacancy rates (under 5%)
• Growing populations
• Diverse employment base
• Good school districts

Single-family homes in suburbs near major metro areas are easiest to finance as a foreign national.

4. Have a US Bank Account

While not always required, having a US bank account signals you're serious about investing in the US. It also makes rent collection and mortgage payments easier.

You can open a US bank account with an ITIN at:

• Bank of America
• Wells Fargo
• Chase (some branches)
• HSBC
• Citibank

Bring your passport, ITIN letter, proof of address in home country, and initial deposit ($100-500).

5. Work with a Property Manager

Lenders feel better knowing a professional US-based property manager will handle tenant issues, repairs, and rent collection while you're overseas.

Expect to pay 8-10% of monthly rent for property management.

Tax Implications for Foreign National Investors

US Tax Filing Requirements

If you earn rental income from US property, you must file a US tax return (Form 1040-NR) annually, even if you don't live in the US.

What you'll pay:

• Federal income tax on net rental income (after expenses)
• State income tax (in most states)
• Possibly FIRPTA withholding when you sell

What you can deduct:

• Mortgage interest
• Property taxes
• Depreciation
• Repairs and maintenance
• Property management fees
• Travel to the US to inspect the property (some restrictions apply)

Tax Treaties

The US has tax treaties with 60+ countries to avoid double taxation. If your home country has a treaty, you may get:

• Reduced withholding rates
• Foreign tax credits to offset double taxation
• Exemptions for certain types of income

Consult a CPA who specializes in foreign national real estate investors. Budget $500-1,500/year for tax prep.

FIRPTA (When You Sell)

FIRPTA (Foreign Investment in Real Property Tax Act) requires a 15% withholding on the gross sales price when a foreign national sells US real estate.

Example:

• Sales price: $400,000
• FIRPTA withholding: $60,000 (held by IRS)
• Your actual capital gains tax might only be $20,000
• You get a $40,000 refund when you file your tax return

This is a cash flow issue, not a tax penalty. But you need to plan for the withholding.

Which Countries Do Lenders Prefer?

Lenders feel most comfortable with foreign nationals from:

1. Canada: Easiest approvals, sometimes 25% down available
2. UK: Strong banking transparency
3. Australia: Similar legal systems
4. China: Large investor base, established track record
5. Singapore: High net worth, stable economy
6. Japan: Consistent payment history
7. South Korea: Growing investor base
8. Mexico: Geographic proximity
9. Brazil: Large diaspora in US
10. India: Tech worker visa holders often invest

If you're from a country with limited banking transparency or political instability, expect extra scrutiny and possibly higher rates or down payments.

Forming a US LLC as a Foreign National

Many foreign investors buy US rental property through an LLC for liability protection. You can form a US LLC as a foreign national:

Advantages:

• Protect personal assets in your home country
• Easier estate planning
• Professional appearance

Disadvantages:

• Annual fees ($100-800 depending on state)
• Possible higher tax rates (no treaty benefits for LLCs in some cases)
• DSCR loans to LLCs require personal guarantee anyway

Most foreign nationals start by buying in their personal name for the first property, then create an LLC for properties 2+.

Geographic Restrictions

Some DSCR lenders won't finance foreign nationals in certain states, typically:

• States with complex landlord-tenant laws (California, New York, New Jersey)
• Rural areas with limited rental demand
• High-cost coastal markets (sometimes)

Best states for foreign national DSCR loans:

• Florida: No state income tax, landlord-friendly, strong rental demand
• Texas: No state income tax, fast-growing markets
• Georgia: Low cost of entry, strong rental yields
• Arizona: Phoenix and Tucson have strong investor activity
• Tennessee: No state income tax, Nashville and Memphis markets
• North Carolina: Charlotte and Raleigh growing fast

Alternatives to DSCR Loans for Foreign Nationals

Portfolio Lenders

Some local banks and credit unions offer portfolio loans to foreign nationals with:

• Lower rates than DSCR loans (sometimes)
• Relationship-based underwriting
• More flexibility on documentation

Downside: Usually shorter terms (5-10 years with balloon payment) and local market only.

Seller Financing

Negotiate with the property seller to finance the purchase:

• No credit check
• No ITIN required
• Flexible terms

Downside: Higher rates (8-12%), large down payment (30-50%), and harder to find motivated sellers.

Hard Money Loans

Short-term loans (6-24 months) based on property value:

• Fast approval (7-14 days)
• No credit check or ITIN required
• Up to 75% LTV

Downside: Expensive (10-15% interest + 3-5 points), not suitable for long-term buy-and-hold.

Real-World Example

Investor profile:

• From Singapore
• No US credit history or SSN
• Applied for ITIN through CAA
• Purchasing single-family rental in Orlando, FL

Property:

• Purchase price: $320,000
• Market rent: $2,400/month
• Property taxes + insurance: $4,800/year ($400/month)

Loan terms:

• Loan amount: $224,000 (30% down = $96,000)
• Rate: 9.25%
• Term: 30 years
• Monthly payment: $1,839 (P&I + taxes + insurance = $2,239)

DSCR: $2,400 ÷ $2,239 = 1.07 ✗ (below lender's 1.2 minimum)

Solution: Increased down payment to 40% ($128,000), lowering loan to $192,000.

• New monthly payment: $1,576 + $400 = $1,976
• New DSCR: $2,400 ÷ $1,976 = 1.21 ✓

Total cash needed:

• Down payment: $128,000
• Closing costs: $8,500
• Reserves: $6,000 (6 months PITI)
• Total: $142,500

The investor closed in 38 days and has positive cash flow of $200/month after property management fees.

The Bottom Line

DSCR loans make US rental property investment accessible for foreign nationals who don't have US credit history, employment, or permanent residency. You'll pay 1-2% higher rates and put down 30-50%, but the opportunity to build wealth in US real estate is real.

Start by:

1. Applying for an ITIN (4-8 weeks)
2. Finding a DSCR lender who works with foreign nationals
3. Targeting landlord-friendly states with strong rental demand
4. Saving 35-40% for down payment plus closing costs and reserves

Work with a US-based real estate agent, property manager, and CPA who understand foreign national investors. The extra support is worth it while you're building your US portfolio from overseas.