Buying Your First Home in the US as an Immigrant: Loans & Eligibility
You don't need US citizenship to buy a home, but the loan types available to you depend on your immigration status.
In short: You can buy a home in the US under almost any lawful immigration status, but the loan type differs. Government-backed FHA loans are now limited to US citizens and green card holders only (since May 25, 2025), while conventional loans through Fannie Mae and Freddie Mac remain open to work-visa holders on roughly the same terms as citizens. Minimum down payment starts at 3.5% for FHA and around 3% for some conventional programs.
Am I even eligible to buy, given my status?
Most likely, yes. US citizenship is not required to own property. But as of May 25, 2025, HUD changed FHA loan rules so the program is now limited to citizens and lawful permanent residents (green card holders); the "non-permanent resident alien" category that used to include work-visa holders like H-1B was eliminated.
If you hold a work visa (H-1B, L-1, O-1, TN, and others) and don't have a green card yet, your path is a conventional loan purchased by Fannie Mae or Freddie Mac through a bank. These remain open to permanent and non-permanent residents on essentially the same terms as US citizens, as long as you have a valid work visa and documented US income.
FHA vs. conventional loans
| Item | FHA Loan | Conventional Loan |
|---|---|---|
| Immigration eligibility | US citizen or green card holder only | Citizen, green card holder, or valid work visa holder |
| Minimum down payment | 3.5% (credit score 580+) or 10% (500–579) | Varies by lender/program, sometimes around 3% |
| Backed by | Federal government (FHA) | Fannie Mae / Freddie Mac or private lender |
| Mortgage insurance | MIP usually required for the life of the loan | PMI, usually cancellable once you reach 20% equity |
Always check HUD's current official guidance at hud.gov before applying — rules can change.
Steps to buying your first home
- Get your financial file in order. Check your credit score (see our credit score guide) and gather documented income via tax returns or pay stubs.
- Get pre-approved. Contact a bank or mortgage lender for a pre-approval letter showing how much you can borrow, before you start actively house-hunting.
- Compare more than one lender. Get quotes from at least three lenders — the difference in rate and closing fees between them can be significant.
- Use a HUD-approved housing counselor. Find one for free or at low cost through CFPB's official housing counselor finder tool.
- Work with a real estate agent. An agent represents your interests in price and terms negotiation, usually without you paying them directly (their commission comes from the seller).
- Make an offer and get a home inspection. Have the structure inspected before committing — it can reveal costly problems later.
- Close the deal. Sign the final paperwork and pay closing costs plus your down payment.
Down payment and closing costs
The down payment is the portion of the home price you pay upfront. For FHA, the minimum is 3.5% with a credit score of 580 or higher, or 10% if your score is between 500 and 579. Closing costs are entirely separate fees covering the appraisal, title insurance, loan processing fees, and attorney fees in some states — ask your lender for a written Loan Estimate early, and don't rely on rough unverified numbers.
First-time buyer assistance programs
HUD maintains a network of approved housing counselors, available free or at low cost, who help you understand loan options and assess your finances without favoring any particular seller or bank. Many states and cities also run local down payment or closing cost assistance programs for first-time buyers; terms and amounts vary by location, so look up the specific program for your state or city through your local housing agency.
Tip: Be wary of anyone charging a "registration fee" to qualify for a government assistance program. Legitimate official programs are free to apply to; you only pay through the lender itself as part of standard loan costs.
Halal financing option
If you prefer to avoid conventional interest, specialized US finance institutions offer Sharia-compliant contracts (such as murabaha or ijara-to-own) as an alternative to a conventional mortgage. See our halal mortgage guide for details and comparison before committing to any contract.
Documents your lender will ask for
Whichever path you choose — FHA or conventional — most lenders request a similar document package to verify your income and financial stability. Prepare these early to speed up pre-approval:
| Document | Note |
|---|---|
| Tax returns, last two years | Full Form 1040 with schedules |
| Pay stubs, last two months | Or equivalent if self-employed |
| Bank statements, last two to three months | To document the source of your down payment funds |
| SSN or ITIN | Some lenders accept ITIN under broader criteria |
| Proof of immigration status | Green card or valid work visa plus employment letter |
| Signed gift letter (if applicable) | If part of your down payment is a family gift, even if wired from abroad |
If part of your down payment comes from family abroad, your lender will typically require a signed gift letter confirming it's a gift, not a loan you must repay, plus documentation showing the source of funds. Prepare this early — tracing international transfers can take longer than expected.
Worked example: buying a $350,000 home
To illustrate the practical difference between the two paths, here's a simplified estimate (actual numbers depend on your specific lender and credit score, so always request a written Loan Estimate):
| Item | FHA (3.5% down) | Conventional (3% down) |
|---|---|---|
| Home price | $350,000 | $350,000 |
| Approximate down payment | $12,250 | $10,500 |
| Mortgage insurance | MIP, usually for the life of the loan | PMI, cancellable once you reach 20% equity |
| Immigration eligibility | Citizen or green card only | Includes valid work visa holders |
A lower down payment isn't always the cheaper option long-term; FHA's MIP usually runs for the life of the loan and can end up costing more than a conventional loan's cancellable PMI, so compare total cost over several years, not just the upfront payment.
Monthly costs after buying: more than just the loan payment
Many first-time buyers budget only for the monthly loan payment and forget other costs that actually get added on each month:
- Property tax — assessed annually by your county or municipality, usually collected monthly by your lender through an escrow account as part of your payment.
- Homeowners insurance — required by any mortgage lender, and typically also paid through that same escrow account.
- HOA fees — apply if the home is part of a planned community or condo with shared management, covering upkeep of common areas.
- Ongoing maintenance — unlike renting, there's no landlord to fix your water heater or roof; budget a separate annual amount for this.
Ask your lender or agent to estimate all of these together before you sign an offer, not after closing, so your total monthly commitment doesn't exceed what you planned for.
What if your loan application gets denied?
A denial isn't the end of the road. Ask your lender for the reason in writing (you're legally entitled to it) — it's usually one of: a high debt-to-income ratio, a short credit history, or undocumented or unstable income. Address that specific issue — pay down existing debt or wait a few months to build a longer payment history — then reapply with the same lender or try another one, since actual approval standards genuinely vary between lenders even within the same loan program.
Common mistakes
- Applying for FHA while only holding a work visa. You'll be automatically rejected since the May 2025 change — ask your lender about a conventional loan instead.
- Not comparing more than one lender. Even half a percentage point in rate means thousands of dollars over the life of the loan.
- Ignoring closing costs when budgeting. Set aside extra funds beyond your down payment, and confirm the exact figure with your lender.
- Buying a home without a home inspection. Saves you from costly surprises after moving in.
What's next
Start by strengthening your credit through our credit score guide, and make sure you have an active bank account via the open a bank account guide. If you're still renting and don't have enough credit history yet, check our renting without credit guide to build your financial track record before applying for a home loan.
Frequently asked questions
Can an H-1B visa holder buy a home in the US?
Yes, through a conventional loan from a bank or private lender following Fannie Mae or Freddie Mac guidelines — but not through FHA, which has been limited to citizens and green card holders since May 25, 2025.
Do I need a Social Security number to buy a home?
Most lenders require an SSN or at least an ITIN to document your income and credit history.
What's the minimum down payment?
For FHA, it's 3.5% with a credit score of 580+, or 10% if your score is 500–579. Conventional Fannie Mae/Freddie Mac loans can start around 3% for certain programs, depending on the lender.
Do I need a long US credit history?
Not necessarily, but a stronger record (paid-off credit cards, past loans) gets you a better rate. Some lenders accept alternative credit history built from rent and utility payments if you don't have a traditional file.
Are closing costs separate from the down payment?
Yes, closing costs are additional fees covering appraisal, title insurance, and loan fees, paid when you sign the final contract. Review the details with your lender and a HUD-approved housing counselor.
Is there Sharia-compliant (halal) home financing in the US?
Yes, specialized finance institutions offer murabaha or ijara-style contracts instead of conventional interest. Treat it as an alternative option and compare the true cost carefully.
Official sources we reviewed
- HUD Mortgagee Letter 2025-09 — FHA citizenship/residency eligibility update ↗
- Fannie Mae Selling Guide — Non-U.S. Citizen Borrower Eligibility ↗
- HUD — Housing Counseling ↗
- CFPB — Find a Housing Counselor ↗
- CFPB — The Closing Process (owning a home) ↗