Connecticut is known for some of the best pizza restaurants across the United States. Luckily for you, its real estate markets are just as diverse as the pizza topping options! Connecticut attracts international real estate investors for its strategic location, rich history, and diverse property options. Whether you're interested in bustling cities like Stamford or serene coastal towns, this state has something for everyone. This guide explains everything you need to know about foreign national mortgages and how to successfully enter Connecticut real estate markets.
We are providing the following discussion to you for informational purposes only. All investments, including real estate, involve risk, and we encourage you to invest carefully. The information in this article is not intended to replace or serve as a substitute for any legal, real estate, tax, or other professional advice or service. You should consult with a professional in the respective legal, tax, accounting, real estate, or other professional area before making any decisions or entering into any contracts relating to a rental property.
Debt-service-coverage-ratio (DSCR) loans are designed for investors who want to buy income-generating properties.These loans are beneficial to international real estate investors because they offer specific features that align well with their needs.
A DSCR loan allows investors to buy rental properties without living in the area. Unlike traditional loans, it focuses on the property's cash flow, not the borrower's income. This makes it easier for foreign investors to purchase property, simplifying the process compared to a traditional mortgage.
To ensure success in obtaining a rental property loan, it’s important to understand the eligibility criteria, explore various property types, and take advantage of options like DSCR loans.
With Waltz’s diverse selection of DSCR loans, international investors can effectively tackle the common challenges of purchasing property in the U.S. and fully leverage Connecticut's advantages.
When pursuing a real estate investment loan in Connecticut as a foreign national, it’s crucial to understand that each lender has unique underwriting criteria.
You should be aware of several important elements of the requirements set by most lenders because some differ from others. Below, we highlight common criteria for foreign nationals with lenders as compared to Waltz, a lender that specializes in serving foreign investors.
Most lenders: Generally, income earned in the U.S. tends to receive less examination than income from other countries. Lenders often ask for documentation of U.S. income or a detailed financial history from your home country. Acceptable documentation may include salary (W2) statements, business income records, bank statements, or other forms of income verification.
Waltz: At Waltz, we specialize in working with international clients. We’re used to reviewing your income from the U.S. and your home country, so it’s not a barrier. This allows us to ask the right questions and request the documentation from the outset.
It’s also important to note that our mortgage solutions primarily focus on the income potential from the rental property you intend to purchase. That means we consider all factors, not just your financial circumstances.
Most lenders: Approximately 50% of international investors opt to pay in cash to avoid financing altogether because it can often be difficult for foreign investors to get a loan. Lenders usually require a larger down payment for those seeking loans, typically between 30% and 50%. There may also be reserve requirements, meaning you must keep a certain amount of funds in your account in addition to the down payment. This covers potential vacancies at rental properties, repairs, or other property-related expenses.
Waltz: We typically ask for a 30% down payment. However, in some cases, it can be as low as 25%. Depending on your financial profile and specific property details, you might not be subject to any reserve requirements.
Most lenders typically ask for proof of identity such as a passport or visa. For loans related to investment properties, it is common for lenders to require that the loan be made to an American LLC, with you serving as a personal guarantor.
Waltz: To verify your identity, all we need is a valid passport—no need for it to be issued by the U.S. Since our focus is on investment property loans, mortgages must also be taken in the name of an LLC.
No LLC, no problem! With our Investor Toolkit, you’ll receive an LLC and a U.S. bank account, which would take months to complete. This approach helps foreign nationals simplify the process and concentrate on their real estate investments.
Most lenders: Many lenders impose a minimum credit score requirement. Some may accept scores as low as 640, which can vary significantly. If you don’t have an American FICO score, securing a mortgage may be challenging as a foreign investor.
Waltz: Investors are not required to have a U.S. credit score. Instead, we may perform alternative credit assessments using international credit histories or evaluations based on your assets.
Find out how international investors have benefited from working with Waltz.
Connecticut offers a diverse range of properties that cater to different investment goals. Whether you're looking to buy a condo to rent out in an urban area or a single family in the suburbs, many options are eligible for DSCR loans in Connecticut.
Investing in Connecticut real estate investment can offer several advantages, particularly for international buyers seeking stability and growth:
Choosing the right location is key to a successful real estate investment. Here are some of the top cities in Connecticut that are ideal for Connecticut real estate investment:
Known for its luxury properties and affluent community, Greenwich offers excellent opportunities for high-end residential investments. Due to its proximity to New York City, it’s also a popular spot for vacation homes and rental properties.
Connecticut's real estate market offers more than just residential and multifamily opportunities—it also has a thriving commercial sector, particularly in Stamford. As a hub for major corporations, including Fortune 500 companies like Charter Communications and Hartford Financial Services Group, Stamford attracts many renters looking to live close to work. Developments like Harbor Point and companies like Indeed.com and McKinsey & Company further boost Stamford’s appeal, making it an attractive option for foreign nationals.
Home to Yale University, New Haven is a cultural and educational hub, making it a prime location for multifamily properties and student housing investments.
The state capital offers affordable real estate prices compared to markets like Greenwich and Stamford. Hartford’s business-friendly environment attracts employees in various industries, such as insurance and healthcare. Interestingly, the healthcare industry in the Hartford region comprises 1,248 businesses over 120,668 jobs, contributing $14.6 billion to the Gross Regional Product.
As one of Connecticut’s largest cities, Bridgeport is a growing urban center with many residential real estate opportunities. Given its proximity to New York City, Bridgeport provides a more cost-effective place to live for renters who need access to the town.
Connecticut has many investment opportunities for foreign nationals. As you consider making a purchase in Connecticut, here are some factors you need to keep in mind:
Refinancing involves replacing your current mortgage with a new one. For foreign nationals, the process typically includes:
Rate-and-term refinancing lets you modify your mortgage terms (such as interest rate or length of the loan). Remember to always to your due diligence: even with a lower interest rate, your total finance charges could end up higher over the life of the loan
Cash-out refinancing is a way to tap into equity you have in existing rental properties. A cash-out refinance replaces your current mortgage with a new one, while providing extra cash at closing as a loan against your equity. This cash gives you access to funds that can help grow your investment portfolio. It can be reinvested into things like home upgrades, debt consolidation, or a down payment on additional properties.
Learn more about refinancing.
Securing a mortgage in Connecticut as a foreign national is simple with Waltz. Here’s a breakdown of the process:
