Foreign National Mortgages: A Guide to Real Estate Investing in Georgia

Utilize Your Investment in Georgia Real Estate with Waltz

Waltz empowers foreign nationals to unlock the potential of Georgia’s real estate market. We provide specialized financial solutions designed to meet the unique needs of international investors. Our Georgia foreign mortgage products feature competitive interest rates, flexible terms, and access to equity for future investment opportunities. Whether you’re seeking to diversify your global portfolio or capitalize on Georgia's thriving real estate landscape, Waltz offers custom-tailored foreign national mortgages to align with your investment goals

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?

Securing financing for a U.S. property as a non-resident can be complex. Foreign national mortgages provide a tailored solution for international investors seeking to own Georgia real estate.

At Waltz, we specialize in simplifying the U.S. real estate financing process for foreign nationals. We have a deep understanding of the Georgia market and the mortgage expertise you need to confidently invest in this thriving state. Let us guide you through the intricacies of U.S. real estate financing and unlock the potential of your Georgia investment.

Benefits of Investing in Georgia Real Estate for Foreign Nationals

A thriving economy, tax incentives, and population growth: there are many good reasons to buy investment property in Georgia! When you invest in Georgia real estate, you get all the benefits of investing in a robust economy driven by industries such as technology, film, and logistics.

Georgia's diverse housing market caters to various preferences, with vibrant urban centers like Atlanta and charming coastal communities. This diversity presents ample opportunities for both residential and commercial real estate investment. The average home price in Georgia stands at $333,862, exhibiting a steady increase of nearly 4% over the past year. While slightly lower than the national average of $362,481, Georgia's housing market remains resilient and offers attractive investment prospects.

The Peach State's commitment to fostering a favorable investment climate is evident in its generous tax incentives. Landlords are encouraged to explore these incentives to maximize their returns and benefit from the state's business-friendly approach.

Here are a few more reasons why Georgia is a smart place to buy investment property:

Georgia’s population is on the incline, and the state recently surpassed the 11 million population mark. Only 8 states in America’s 50 states have 11 million residents.
The state's low unemployment rate (3.4%, compared to the national average of 4.3%) and high salaries in areas like Atlanta enhance the appeal for potential landlords.
In 2022, Georgia had its best-ever year for tourism, welcoming 168 million people and generating $73 billion for the state. This thriving tourism industry has significantly boosted demand for rental properties.

Specific Considerations for Mortgages in Georgia

Georgia offers many attractive options for real estate investment. However, like any state, there are specific factors to consider.

Georgia is a coastal city located on America’s East Coast. Georgia’s prime location facing the Atlantic Ocean makes it susceptible to severe weather, including hurricanes and tornadoes, especially in coastal regions. This can impact property insurance costs and potential damage risks. The average homeowner’s insurance price is $1,950 per year. This number is higher than the national average of $1,754 per year.

Additionally, while Georgia's overall cost of living is lower than the national average, and real estate prices in certain areas, particularly in Atlanta and its suburbs, can be quite competitive. Currently, the average home sold in Atlanta is worth $400,000, which is about $40,000 higher than the national average. These higher prices might impact your potential return on investment.

Which Georgia Cities Offer Strong Investment Potential?

Georgia is famous for its Southern hospitality and thriving urban cities, which offer everything from the excitement of a major metropolis to a slower-paced, but still exciting, way of life. Here are some of the state’s top real estate markets:

Atlanta: As Georgia’s capital and largest city, Atlanta offers a dynamic real estate market that is very favorable to foreign national real estate investors. Over half (55%) of Atlanta households are renters, and all of the most in-demand neighborhoods fetch a monthly rent price of over $2,100.
Savannah: Savannah is renowned for its historic allure, stunning architecture, and thriving tourism industry. In recent years, rental prices in Savannah experienced a significant surge, climbing nearly 25% in 2021. While the market has seen a slight cooling in recent times, the enduring appeal of Savannah's lifestyle continues to drive strong demand for housing.
Augusta: Home to the Masters Tournament (any golf fans out there?) and a growing medical center, Augusta offers a strong economy and a desirable quality of life. ‍
Athens: As the home of the University of Georgia, Athens boasts a vibrant college town atmosphere, a growing tech scene, and a strong rental market filled with students and young professionals.

Types of Mortgages Available for Foreign Nationals in Georgia

Foreign nationals can access a variety of mortgage products in Georgia, 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.
Fixed-Rate Mortgages: These are the most common type of mortgage, offering a fixed interest rate for the entire loan term (typically 15 or 30 years). This provides stability and predictability in monthly payments.
Adjustable-Rate Mortgages (ARMs): ARMs offer lower initial interest rates, but the rate can adjust periodically based on a specific index. They can be a good option for borrowers who plan to sell or refinance the property before the interest rate adjusts significantly.
Interest Only Mortgages: With an interest-only mortgage, you only pay the interest on the loan for a specified period. The principal balance remains unchanged. This can result in lower monthly payments, but you're not building equity in the property during this time and the entire principal balance is due at the end of the interest-only period.
‍Balloon Mortgages: A balloon mortgage is a short-term loan with a large final payment due at the end of the term. The monthly payments during the loan term are typically lower than a traditional mortgage, but the balloon payment can be substantial.

Process of Refinancing for Foreign Nationals in Georgia

Refinancing your Georgia investment property means carefully replacing your current mortgage with a new one. This entails taking out a mortgage to use the equity in their residences to fund new investments.

Waltz offers comprehensive and effective solutions to ease this process for Georgia real estate investors. Our knowledge ensures that you may securely and successfully optimize your Georgia real estate investing strategies.

The refinancing process for foreign nationals generally involves:

Determining your property's current market value
Exploring different loan terms and interest rates to find the best deal
Preparing financial documents, including income verification and property ownership proof
Completing the application process
Once approved, finalizing the refinancing transaction

Exploring Refinancing Options for Foreign National Mortgages in Georgia

Rate-and-term refinance

This option can be quite interesting for foreigners looking to invest in the Georgia market because it allows you to adjust the terms of your current mortgage— with the potential that it can result in a better deal on your house loan. 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

At Waltz, we proudly offer this option to Georgia foreign investors as it allows you to access your property's equity— allowing you to borrow more than the current mortgage balance (based on the original equity).

For those interested in Georgia real estate investments, the additional funds can be utilized for various personal objectives, such as home upgrades, debt consolidation, or a down payment on another property. This provides you with cash at closing for a range of needs, broadening your investment opportunities while leveraging the best foreign national mortgages Georgia has to offer.

Tax Considerations for Foreign Nationals with Georgia Real Estate Investments

Seeking advice from a tax expert is always a smart move. Please note, this does not constitute legal or tax advice. Understanding the tax implications of owning Georgia real estate is essential for foreign investors. Key tax considerations include:

Property Taxes: Georgia has a property tax rate of about 0.81%. Foreigners in Georgia benefit from a property tax rate about $800 lower than the national average. Real estate investors still have to pay property taxes, but the lower rates make it more financially advantageous for property buyers.
Income Tax: Georgia has a state income tax of 5.49%. This tax rate applies to rental income generated from your Georgia property.
Federal Income Tax: Rental income from your Georgia property is also subject to federal income tax.
Foreign Investment in Real Property Tax Act (FIRPTA): If you sell your Georgia property, you may be subject to FIRPTA withholding, which requires a portion of the sale proceeds to be withheld for potential U.S. capital gains taxes.‍
Transfer Tax: Georgia imposes a real estate transfer tax, which is typically shared between the buyer and seller.