If you’re a German citizen planning on owning real estate in the U.S., you’re in luck! The great news is that the U.S. welcomes non-citizens to purchase property without restrictions. But what are the rules, and how can a German citizen get a mortgage in the U.S.?
In this guide, we will share all the details, from understanding mortgage financing differences between Germany and the U.S. to gathering the necessary documentation.
Can German Citizens buy real estate in the U.S.?
Yes, German citizens can obtain a mortgage to buy real estate in the U.S. as the U.S. does not restrict non-citizens from owning property here.
Buying a property as a German citizen in the U.S. is rather simple; all you need to do is meet a set of criteria. Read along to find the differences in mortgage financing in Germany and the U.S.
What are the differences between getting a mortgage in Germany versus the U.S.?
Here are all the differences between getting a mortgage in Germany and the U.S.
| Aspect | United States | Germany |
| Homeownership Rate | ~65% | < 50% |
| Government Involvement | Extensive involvement (Fannie Mae, Freddie Mac, FHA) | Limited involvement, with a focus on private rental market |
| Mortgage Interest Deduction | Mortgage interest is tax-deductible | No mortgage interest tax deduction |
| Capital Gains on Home Sale | Excluded from taxes (up to a certain limit) | No capital gains exclusion |
| Government Mortgage Guarantees | Public guarantees (Fannie Mae, Freddie Mac) | No public guarantees, rely on private schemes. |
| Fixed-Rate Mortgages | Common (30-year fixed rates) | Typically fixed for 5-10 years |
| Down Payment | Lower, often 3%-25% | Higher, typically 20%-30% |
| Central Bank Support | Significant (Federal Reserve purchases of mortgage-backed securities) | Limited ECB support, smaller-scale bond purchases |
| Tax Subsidies | Significant tax subsidies for homeowners | Minimal tax subsidies for homeowners |
| Mortgage Refinancing | Easy refinancing allows tapping into home equity | Strict rules, refinancing is more complex |
| Market for Home Equity | Well-developed, large-scale home equity loans | Minimal market for home equity loans |
| Housing Sector Contribution to GDP | ~16% | ~19%, but less central to overall economic growth |
Documents Required for German Citizens to Purchase Property in the U.S.
The documents required to purchase a property in the U.S. as a German citizen differ depending on the type of property and the mortgage you intend to obtain.
This is a list of commonly required documents to obtain a mortgage in U.S. as a German citizen:
- A valid German passport.
- Bank statements: in some cases, you may be asked for some documents from your bank back in Germany.
- Proof of funds to cover the mortgage for a specific period.
- Pay stubs to verify income if the property is for self use (not a rental)
- Tax return documents if the property is for self use (not a rental)
- If the property is strictly for investment/rental then NO personal income proof is required, as the loan is qualified from the rental income generated from the property.
It’s worth noting that German citizens can obtain a U.S. mortgage even if they don’t have a U.S. credit history.
Mortgage options for Germans buying property in the U.S.
Foreign National Mortgage
Foreign National Mortgage is a tailored solution for foreign nationals. Making it a great option for German citizens who don’t have a U.S. credit history.
DSCR Loan (For Investment Properties)
Debt Service Coverage Ratio (DSCR) loans are specialized mortgage solutions for those foreign nationals who want to buy property in the U.S. for investment purposes only. While having a U.S. credit history is great, America Mortgages does not require you to have any U.S. credit history.
America Mortgages helps foreign nationals obtain U.S. mortgages. If you’re interested in learning more, reach out to us at [email protected] or visit our website at www.americamortgages.com.
Additionally, if you’d like to schedule a commitment-free meeting with one of our U.S. loan officers to explore your U.S. mortgage options further, you can do so using our 24/7 calendar link.
