How can Israelis get a mortgage in the US?

In response to Liat Michalovitch and others, I will try to answer this question in more detail:

At the high level, there are two types of mortgages: Residential and- Commercial , When Israelis fall under the category of Foreign Nationals (Foreigners), which only relatively few lenders are willing to give them loans - of both types.

Residential Mortgages
* Designed to buy houses of 1-4 units under the name of a person rather than a company.
* They are also intended primarily for U.S. citizens and residents who have a Social Security Number - SSN, including citizens residing in the country, with more limited options for foreigners with ITIN.
* You will need to work with an authorized lender in the specific country where the asset is located (eg I can help with 23 countries now, and in other countries soon) and expect many documents with notarized translation into English. These include:
1. Before the start of the process you will be required to fill out a mortgage application, and in the early stages you will sign a number of documents that will enable the lender to verify information against the authorities.
2. Payslips,
3. IRS 106 forms
4. Registration of your home in Israel
5. Home insurance policy in Israel
6. Municipal property bills
7. Mortgage account (incidentally, it is much easier to show a mortgage account than to try to convince an underwriter that you have no debts on the house in the country)
8. Two months of bank statements,
9. Etc. as will be required by the underwriter or the terms of the specific loan

* The mortgage agent will make sure that your income, as reflected in the pay slips and tax returns, is at least twice as high as your housing and debt expenses, will try to get approval from your employer that you actually work for him in a permanent and stable job, etc.
* The ratio of loan to value will usually not exceed the 40% to 60%, and foreigners will not be able to include renovation or construction costs.
* There are specific residential loans for investors that are based solely on the data and cash flow of the specific property, or loans for the self-employed based on actual deposits in the bank account, but these loans usually bear higher interest rates.

Commercial Mortgages - Commercial
* In my work with Israelis, I concentrate on these loans, as they offer more flexibility. In most countries the enforcement of these loans is relatively reduced, and they are less traded in the secondary market, so there are almost no “rules of thumb” or guidelines that apply to all loans. Almost anything is possible - for the right price.
* Mostly loans against a multi or portfolio of 5+ housing units, office buildings, shops and commerce, self-storage, etc., but sometimes also properties of 1-4 units - if they are purchased under a business (LLC), and are intended solely for rent ( As long as the loan is valid, the owners or their family members are not allowed to live in the property - not even for short periods!).
* Although these are business loans, and the property is held under LLC, most of them are considered a Loan Loan - a loan in which if the asset does not cover the debt, the lender can demand the difference from you, and accordingly will require a personal guarantee from the company owners.
* General conditions for the loan (can vary depending on the specific product and lender):
1. The business should be active and profitable for at least two years (exceptions can be made but conditions will be affected)
2. The business must be in the form of S-Corp, LLC, C-Corp, or a general partnership
3. There are no personal / business bankruptcies within the last 7 years
4. FICO rating must be 620 + minimum (minimum 700 for preferred conditions)
5. Any owner with a holding of 20% or more in the business must sign the loan (exceptions can be made but conditions will be affected)

* Before starting the process you will be asked to provide several forms to help start the process:
1. Mortgage application - Any partner with over 20% ownership must complete a form and sign
2. Finder's Fee Agreement form: a commitment to pay the broker for the service
3. Business Use Affidavit: A statement that the property was acquired as an investment for commercial purposes only.
4. Personal Financial Statement - A form that looks at your finances, as well as your business. You want to know how stable you are.

* In addition, you will be asked to provide (at least) the following documents (but as mentioned above, if you do not have some of the documents, this is not automatic disqualification, but will reduce the pool of lenders who are willing to help)
1. Six months of business bank statements (all pages - also blank)
2. 2 years of business tax rebates
3. Two years of individual tax returns of each partner (20% or more of ownership)
4. Profit and loss report (P&L) for the current year (if the application is submitted in the first quarter, it is recommended to submit a report of the previous year, and a report of the current year until the date of the application. Same if the current year was high one-time expenses , And attach a signed explanatory letter)
5. Balance Sheet for the current year (or previous year if current year is not available)
6. Copy of driver's license (both sides of license)
7. T12 P&L Report: Profit and loss report or historical activity report of the proposed asset (s) over the last 12 months including history of timely payments, maintenance expenses per unit, etc.
8. Pro-Forma Report: An expected income and expense report, including the impact of renovations and improvements or adjustment to market conditions, if applicable.
9. Rent-Roll Report: List of all units in the property (ies), rent per unit, vacant units, term of the current contract.

It is important to plan: Closing a loan to foreign residents can take extra time. Assume 60-90 a day from the time you provided all the documents for a specific asset, and you received a Letter Of Intent - LOI (receiving LOI can take about a week or two per se). If you are under time pressure, or the property requires renovation before being ready to rent, or the loan is required for a term of 6-24 months, higher cost hard money bridging loans can be used within 2-21 day. If you are able to establish a trust with a bridging loan lender, it may even approve a business line of credit that will require only minimal documents to raise funds for new projects.

When you work with a mortgage broker like myself, you benefit from the accumulated knowledge of dozens of transactions, and access to a growing pool of potential lenders.

I will be happy to answer further questions!

Link to the original post in the United States Real Estate Forum on Facebook - Works on a desktop computer (To view the post must be members approved for the forum)

The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion