Many foreign investors are told to expect 30% to 40% down simply because they live abroad. That is a feature of lenders who price nationality as a risk. In business-purpose lending to a US LLC, the deal is underwritten on the property and the plan, and the leverage is the leverage of the product. Passy Capital applies the same maximums to a foreign national as to a US investor, with no US credit history required.
The down payment is therefore the part of the price, or of the total project cost, that the loan does not cover. The table shows the published maximums and what they imply in equity.
Maximum leverage and minimum equity by loan type
These are ceilings, not promises. The appraisal, the strength of the exit, your experience with similar projects and the market all decide where a specific loan lands. Exact terms depend on the deal and are set in the term sheet, which comes back in 24 to 48 hours.
| Loan | Maximum leverage | Equity you bring, at most leverage | Measured against |
|---|---|---|---|
| Bridge (purchase) | Up to 80% LTV | About 20% | Property value or price |
| Bridge (cash-out) | Up to 75% LTV (5 points lower) | At least 25% equity left in the property | Property value |
| Ground-up construction | Up to 85% LTC | About 15% | Land plus construction cost |
| Fix and flip | Up to 90% LTC | About 10% | Purchase plus renovation budget |
| Renovation | Up to 90% LTC | About 10% | Purchase plus renovation budget |
| DSCR (rental, purchase) | Up to 80% LTV | About 20% | Property value or price |
Two worked examples
- A $2,000,000 rental bought with a DSCR loan at 80% LTV: the loan is $1,600,000 and the equity is $400,000, before closing costs.
- A flip bought for $1,500,000 with a $500,000 renovation budget: total cost is $2,000,000, so 90% LTC is a $1,800,000 loan and $200,000 of equity, before closing costs. The renovation part of the loan is released in draws as work is completed.
Cash you need on top of the down payment
Budget for more than the equity line. The lender fee is 1% to 2% of the loan, paid at closing, with no upfront fees. Title, appraisal, legal and recording costs vary by state; Florida, for example, charges documentary stamp tax on the deed and on the note. The LLC also needs a funded US bank account, and lenders look at liquidity after closing so the loan can be carried through the project.
For a foreign investor, the timing of the money matters as much as the amount. Wire the equity to the LLC's US account early, because international transfers and the bank's own compliance checks can take days.
Why nationality does not change the leverage here
The loan is made to a US LLC and secured by a non-owner-occupied investment property. The lender's protection is the asset and the structure, not your personal US file, so there is no reason to cut leverage because you live in Geneva, Toronto or Sao Paulo. What does reduce leverage is the deal: a thin exit, an aggressive budget, or an appraisal that comes in under the contract price.
If you are comparing offers, ask each lender to quote leverage and rate as numbers on the same deal. The foreign national loans page sets out how Passy Capital structures these loans, and what we fund lists the property types in the box.
Before you sign a purchase contract
- Form the US LLC and apply for its EIN; see setting up a US LLC
- Size the equity on the most conservative line of the table for your product
- Add 1% to 2% for the lender fee, plus title, appraisal and state taxes
- Send the deal for a term sheet before the inspection period ends