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For Borrowers · 4 min read

Foreign national mortgage or business-purpose loan: which one does a foreign investor need?

By David Hodara ·

Short Answer

It depends on who holds the property and how it is used. "Foreign national mortgage" is the label lenders use for a loan made to a non-resident personally, often available for a second home as well as a rental. Passy Capital does not offer those. If you are buying US property to rent out or to resell, and you hold it in a US LLC, what you need is a business-purpose loan made to the LLC and secured by the non-owner-occupied property: a DSCR loan for a long-term rental, or a bridge, fix and flip, renovation or construction loan for a shorter hold. That is the only kind of financing Passy Capital arranges, from $1M to $5M, with no US credit history required and the same terms a US investor would get.

Most non-residents start their search with the words "foreign national mortgage", because at home that is the word for any loan secured by property. In the United States the distinction matters more than the vocabulary suggests. Whether the loan is made to you as a person or to a US company, and whether anyone will live in the property, changes the rules that apply, the documents you are asked for, and who is able to lend.

Passy Capital is not a consumer mortgage lender. This page explains the difference so you can tell which door is the right one before you spend time on the wrong one.

What a foreign national mortgage usually means

The label covers loans made to a non-resident individual, in their own name. Depending on the lender, these programs are often available for a second home that the borrower or their family will use, as well as for a rental.

Passy Capital does not arrange loans to individuals, and does not finance a property that you or your family will live in, even part of the year. If that is your plan, a lender offering consumer loans to non-residents is the right place to ask.

What a business-purpose loan is

A business-purpose loan is made to a US LLC that owns the property, and it is secured by a non-owner-occupied investment property: a rental you hold for income, or a property you renovate or build to sell. Lending to an entity rather than to an individual is what keeps an investment-property loan business-purpose and outside consumer mortgage regulation.

The deal is underwritten on the asset and the plan (asset-based underwriting): the property's value, its rent or its exit, and your ability to service the loan. A US credit score is not what decides it, which is why a foreign investor with no US history can qualify on the same terms as a US investor.

  • DSCR loan: long-term financing for a rental, qualified on the property's rent
  • Bridge loan: short-term financing to buy fast, reposition, or refinance later
  • Fix and flip and renovation loans: purchase plus the cost of the works, for a resale or a rental
  • Construction loan: ground-up building on an investment basis

How to tell which one you need

  • You or your family will live in the property at any point: this is not a business-purpose loan, and not something Passy Capital arranges
  • You want to hold the property in your own name: same answer, the loan would be made to you personally
  • You will hold the property in a US LLC and rent it out, renovate it or resell it: you need a business-purpose loan, which is exactly what Passy Capital arranges

What changes for you in practice

The first step is the US LLC, not the loan application. You form the company, obtain its EIN (available without a Social Security number) and open its US bank account. The loan is then made to that LLC.

In return, the file is shorter than most foreign investors expect: no US credit score, no US tax returns, no US pay stubs. Loans focus on $1M to $5M, a term sheet comes back in 24 to 48 hours, and a clean file closes in about two weeks. Larger deals are placed case by case through the capital-partner network.

Got a deal where this matters?

We structure and fund CRE debt across the capital stack. $1M–$5M across all 50 states.