Investing in Florida: A Guide to Foreign National Mortgages

Empower Your Real Estate Ventures by Investing in Real Estate in Florida

Unlock the full potential of your Florida real estate investment with Waltz. Waltz offers financial solutions for foreign nationals, whether you're looking to secure a mortgage for a property you are interested in, or simply looking to refinance your investment property. Waltz provides tailored solutions to meet your unique needs and help you achieve your dream of owning an investment property in Florida USA.

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.

What are Foreign National Mortgages?

A foreign national mortgage is a type of financing developed exclusively for non-U.S. residents looking to buy property in the United States. Typically, foreign national mortgages have slightly different terms than those offered to U.S. residents, reflecting the increased risk assessed by willing lenders.

At Waltz, we help you obtain mortgages tailored to the specific demands and conditions of foreign investors, taking into account the various financial, legal, and regulatory landscapes that apply to Florida investment properties.

Benefits of Investing in Florida Real Estate for Foreign Nationals

For foreigners looking to invest in real estate in the U.S., Florida is one of the most popular options across the region. The advantages of investing in property in Florida include:

Strong economy
Growing tourism industry
No state income tax

ll of these things can boost your return on investment. Plus, Florida's warm climate, lovely beaches, and various cultural attractions make it a fun and exciting destination for both residential and commercial property investments.

Specific Considerations & Requirements for Mortgages in Florida

Florida presents unique challenges and opportunities for real estate investors. Unlike other U.S. states, purchasing an investment property here may require additional steps and expenses before you can finance your investment property in Florida.

For example, surveys to establish the boundaries of your property and insurance coverage for wind, hail, and hurricanes are often necessary. Florida also has unique taxation laws compared to other U.S. states. Mortgage and property taxes are two major considerations for anyone considering a U.S. investment property, so it’s important to keep up to date with these regulations.

Which Cities in Florida are Best for Foreign National Investing?

Florida is rich with investment opportunities, thanks to its favorable climate and growing population. Five cities are particularly attractive for foreign national investing:

Tampa: This sun-soaked city offers a trifecta of affordability, strong rental income, and impressive property value growth. With a limited housing supply and a growing population, investing in real estate in Tampa means being part of a landlord's market with soaring rental rates.

Orlando: The "Theme Park Capital of the World" continues to boom. Fueled by tourism and job creation, Orlando experiences high demand for rental properties. Low inventory and a large renter population make it an ideal location for investors seeking steady returns.

Jacksonville: This city offers a winning combination of affordability, healthy property appreciation, and high occupancy rates. Investors seeking a strong rental market with a lower entry point can find attractive opportunities in Jacksonville's thriving suburbs.

Miami: As a global metropolis with a vibrant cultural scene, Miami boasts impressive rental income and consistent property value growth. Miami's high renter population and history of appreciation make it a compelling choice for long-term investors.
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‍Fort Lauderdale: This dynamic city attracts young professionals with its thriving job market and exciting lifestyle. Fort Lauderdale's booming real estate market offers significant appreciation potential, coupled with strong rental income growth.

Types of Mortgages Available for Foreign Nationals Investing in Real Estate in Florida

Foreign nationals can access a variety of mortgage products, each with its own benefits:

DSCR Loan: Debt service coverage ratio (DSCR) loans make it easier for foreign investors to buy US rental properties. Unlike traditional mortgages that heavily rely on a borrower's personal income and credit, DSCR loans focus on the property's ability to generate income. By focusing on the property's income-generating potential rather than the investor's personal finances, DSCR loans eliminate the traditional hurdles often faced by international buyers. Waltz specializes in DSCR loans for foreign investors. Contact us to get started.
Non-Resident Conventional Loan: These loans offer competitive rates but typically require a higher down payment (often 30% or more) and may not require a U.S. credit history.
ITIN Loan (for certain non-residents): This program allows qualified borrowers to use an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. It often has down payment requirements around 30% and may have specific requirements for employment and income verification.
Jumbo Loan (for high-value properties): Jumbo loans are for mortgages that exceed $766,000, and sometimes over $1 million. These programs are more exclusive and cater to foreign investors with substantial assets and strong financial profiles.‍
Hard Money Loan: This is a short-term option from private lenders. It can be useful for quick closings but comes with higher interest rates and stricter terms.

Process of Refinancing for Foreigner Nationals in Florida

Refinancing your real estate investment in Florida –whether it’s in Miami, Tampa, Orlando, Fort Lauderdale, Jacksonville, or somewhere else– involves strategically replacing an existing mortgage with a new one. For those who purchased all-cash, this involves acquiring a mortgage for the first time to leverage property equity for future investments. At Waltz, we understand the importance of this procedure for those real estate investing in Florida, and we provide seamless solutions to maximize investment strategies to do so.

Rate-and-term refinance

This option can be very appealing for foreigners who want to invest in Florida real estate. Rate-and-term refinance allows you to modify the terms of your current mortgage, potentially resulting in a better bargain on your home loan. By modifying the interest rate and duration to reflect your current balance, you can replace previous loans with better terms or cut the loan duration to pay it off faster.

Please note that even if you refinance an existing loan at a lower interest rate, your total finance charges may be higher over the life of your loan.

Cash-out refinance

Cash-out refinancing allows you to access your property's equity by borrowing more than your current mortgage balance. Use the extra funds for home improvements, debt consolidation, or a down payment on another property. We specialize in refinancing for foreign nationals investing in U.S. real estate, so you can take advantage of the best foreign national mortgages Florida has to offer.

Tax Considerations for Foreign Nationals with Florida Real Estate Investments

Real estate investing in Florida comes with certain tax obligations. We highly recommend consulting with both a U.S. tax advisor and your home country's tax advisor to learn more about the implications of making investment income in the United States.

Here are some key Florida real estate taxes to consider:

Property Taxes: All property owners in Florida pay annual property taxes based on the assessed value of their property. These taxes are typically paid to the county where the property is located. For example, if you have investment properties in Orlando, Florida, your property taxes will go to Orange County’s government offices.

Capital Gains Taxes under FIRPTA (Foreign Investment in Real Property Tax Act): This is a crucial point for foreign investors. When you sell your Florida investment property, you will likely be subject to capital gains tax on any profit you make. FIRPTA requires a withholding tax of 15% from the sale proceeds to ensure this tax is collected. There may be ways to reduce or eliminate this withholding tax burden, but it's important to consult with a tax advisor familiar with FIRPTA rules and any applicable tax treaties between your home country and the U.S.
‍Estate Taxes: If you own property in Florida at the time of your death, it may be subject to U.S. estate taxes. The estate tax exemption is quite high for U.S. citizens and residents, but for foreign nationals, the exemption amount is significantly lower. There are ways to minimize estate tax exposure on Florida real estate, but careful tax planning is essential.

Waltz Will Help You Invest in Florida Real Estate

Investing in Florida real estate can be a great opportunity, but navigating the legalities and setting up the right structures can be daunting, especially for foreign nationals. Waltz can help streamline the process and ensure you're set up for success.

Our Investor Kit simplifies the process in just a few clicks.

LLC Formation Tailored for You: We'll establish a Limited Liability Company (LLC) that meets your specific investment needs. This protects your personal assets while ensuring compliance with Florida regulations.
EIN Secured: Get a unique Employer Identification Number (EIN) – a crucial step for opening bank accounts and managing your property finances.²
Operating Agreement Made Easy: We'll handle the operating agreement, outlining ownership structure and management within your LLC. All completed in just 20 minutes – saving you valuable time and ensuring everything is in order.

After you purchase your Investor Kit, Waltz provides loans up to 70% LTV.³ You’ll also be able to open a U.S.-based bank account through Waltz to handle your property’s financing.