J1 Visa FAQ | How to Get a Mortgage Loan?
Attention J1 Visa Holders | You too can own a home in the USA.
J1 VISA | Overview
Many foreigners visit and stay in the United States to gain access to a wide array of educational and employment opportunities this country has to offer. Once here, these visitors will need to find a place to live which usually leads to the question of should I buy or rent housing?
As most people prefer to buy and own a house versus paying rent, we will concentrate the rest of this article on how J1 visa holders can purchase a home here in the USA.
If you are a cash buyer, there are few restrictions, if any, so no need to worry.
If you require financing, then please continue reading to see how J1 visa holders can be successful in applying and obtaining a mortage loan.
WHAT IS A J1 VISA?
A J-1 visa is a non-immigrant visa issued by the United States to research scholars, professors and exchange visitors participating in programs that promote cultural exchange, especially to obtain medical or business training within the U.S.
J1 VISA 2-YEAR RULE?
Some exchange visitors with J-1 visas are subject to a two-year home-country physical presence requirement. It requires, unless a waiver is granted, that the J1 visa holder to return home for at least two years after your exchange visitor program. This requirement is part of U.S. law, in the Immigration and Nationality Act, Section 212(e).
Since the J1 visa is not a working visa and most visitors’ working contracts are renewed year by year, some banks and lenders have indicated that the uncertainty of the applicant’s residency status can be an impediment to the loan approval process. This, of course, can lead to a delay in an applicant’s loan approval or an outright rejection.
MORTGAGE LOAN FIRST STEP | THE PRE-APPROVAL LETTER
The first step you need to take before you start searching for your dream house is to get a pre-approval letter from a bank or mortgage lender. Not only will this help facilitate the ultimate purchase of your dream home, but it will help guide you and your real estate agent on what type of house you can afford?
The next step is to start talking to mortgage lenders to see if they will accept loan applications from J1 visa holders. If you are not sure where to start or who to contact, then ask a friend, your local bank or better yet a real estate agent who is familiar with the J1 visa process. Why is it better? – Because eventually you will need to hire a real estate agent to help you find your dream home and what better choice than an agent who can help you get your pre-approval letter.
Lastly, you should take comfort in the fact that obtaining a pre-approval letter from a lender is an aggravating process for everyone – even U.S. citizens. That said, don’t’ get discouraged by the process. Instead, be smart in your approach to solve this problem. For example, when you talk to the different lenders establish upfront that they don’t have any restrictions on loaning money to a J1 visa holder. If they do, then move on to the next lender until you find one that will accept loan applications from J1 visa holders. In doing so, you will save yourself a lot of time and aggravation.
DOCUMENTS J1 VISA HOLDERS SHOULD HAVE READY
Another important piece of advice for anyone applying for a loan application is to have your documents ready (see list following). For J1 visa holders, the DS-2019 form is a must-have document that most if not all lenders will want to see. This document identifies the exchange visitor (or J-2 dependent) and the designated sponsor. It also provides a brief description of the exchange visitor’s program, including the start and end date, category of exchange and an estimate of the cost of the exchange program. Note, if the expiration date on your DS-2019 form is imminent, the lender may ask you to prove that you will get it renewed.
- Proof of Assets (Down Payment): Bank statement(s) showing you have the 20% down payment. If your balance falls below the 20% down payment requirement, lenders will require you purchase private mortgage insurance (PMI).
- Good Credit History: Generally speaking, a credit score above 740 will help you get a lower loan interest rate.
- Identification: A US driver's license or your own passport.
- Certificate of Eligibility for Exchange Visitor Status: The latest DS-2019 form.
- Proof of Income: A W2 for the past two years, which is the annual salary summary provided by your employer; A tax return for the last two years; Last month's paystub.
- Change of Jobs: If you change jobs during the loan application period, you should also provide an offer of the new job.
Final Step | Hire a Qualified Real Estate Agent
Once your mortgage loan request gets pre-approved, then it’s time to hire an experienced real estate agent to help you find your dream home. Congratulations and good luck!
About Team Coyle
Team Coyle is a professional group of real estate agents at Compass with more than ten years of experience helping individuals and families buy and sell real estate in Massachusetts (primarily in the Metro West region).