Can TN Buy a house in USA?

Dave · Post by **Dave** » Wed Oct 27, 2004 2:00 pm

Instead of paying rent, my wife and I are thinking of buying a house and building up our equity while living temporary here in the US. Is it a violation to own a property since the regulations state that: "TN is a Temporary entry, as defined in the NAFTA, means entry without the intent to establish permanent residence"?

Nelson · Post by **Nelson** » Wed Oct 27, 2004 2:00 pm

Don't overthink this issue.
Even Cdn tourists can own property in US, so a TN can obviously too.

You need to have good Cdn credit history if you buy soon after entering US (I bought 12 days after arrival). You will need to deal locally, as on-line mortgage vendors will not take the time to look at your Cdn credit.

You need manual underwriting.

Having a decent downpayment will help, but is not required.

Stuart G · Post by **Stuart G** » Wed Oct 27, 2004 2:02 pm

If you have 24 months of US credit history then you don't need to use your Canadian credit history. In that case it is also possible to do the common 80% 1st and 5/10/15% 2nd mortgage option that is available to other US residents. That means that you can hold onto your cash and still avoid PMI (mortgage insurance).
I wouldn't count on any guarantee of "building up [your] equity". There are a lot of factors that may cause a stagnation or even fall in housing prices in many areas. For a new buyer who may have to leave at very short notice (i.e. someone on a TN) then having a protection against housing market downturns would be very prudent. Putting the minimum amount down possible while still keeping your interest rates low will buffer you to some degree if that happens. Some states, such as California, make it difficult to impossible for the mortgage holder to come after you other assets if you decide to turn the house over to them. The less cash you have in the house then the less turning it over to the mortgage holder will hurt you.

You really want a worst case exit strategy. It will hurt if you have to use it but you want to make sure that it will hurt as little as possible.

Stuart G.

Matthew Brooks · Post by **Matthew Brooks** » Wed Oct 27, 2004 2:04 pm

For what it's worth, I'd recommend against it generally. Anything can happen to your job, then you're stuck selling a house, and don't count on breaking even for at least a couple of years ownership. The market has done well, but it may not as of now - you never know!

Only you know your financial situation, but unless you're talking long term, the whole thing about "stop throwing money away into rent" is highly overrated. We pay $1100/month mortgage, plus water, sewer, garbage, increased power bill, vs. the $750 we were paying for a nice apartment before. I'm glad we're doing it but $400+ difference is a lot of equity right there, if you sock it away.

Stuart G · Post by **Stuart G** » Wed Oct 27, 2004 2:05 pm

I will second Matt's recommendation against buying on a visa/work status "in general". Don't do it unless you are able to handle losing every penny that you paid on downpayment, closing costs, and monthly mortgage payments. If the housing market you are in drops (and they all do from time to time) and you lose your TN status and return to Canada this may be exactly what happens. These aren't even independent events - a downturn in your local economy may cause the loss of your job and a general downturn in the housing market.
If you do have the asset base to take such a loss then you want to minimize the effects of such a worst case scenario. You do that by putting as little money as possible into the deal.

Stuart G.

David · Post by **David** » Thu Oct 28, 2004 6:04 pm

I bought my house on a TN but my plans were to stay for a good period of time. If you intend to stay in the same location and persue permanant residence then I think you are wise to buy the house before you get your permanant status.

I bought my house over 6 years ago while on a TN. Becuase I changed jobs 3 times and the delays inherent in the process I had my green card approved just this month. The price of the house has more than doubled so I'm glad I did not wait.

costandi · Post by **costandi** » Thu Oct 28, 2004 8:11 pm

I bought a house in Florida in January of this year after arriving on a TN in November but I have a US wife. The biggest issue in securing financing wasn't the credit history but not having a SSN. It took 18 weeks to get my SSN and I applied the first day I arrived in the country. I think the TN confused them.

Thu Oct 28, 2004 10:34 pm

I have always been a proponent of buying real estate... but I think you need to be realistic, and realize that you may have to rent the property and keep it as an investment property if you lose your TN job.

This means you are in two separate endeavors.. a) Working on your job; and b) Real estate investor.

You should only buy in a market that you know will be readily rentable in the event that you need to vacate.

Regards,

Mark T. Serbinski, CA, CPA

jen · Post by **jen** » Tue Nov 09, 2004 6:04 pm

When I bought a condo, I remember the seller signing a document stating that he was not leaving the state (CA) or country. If the seller was leaving the state/country the buyer was to withhold 3/10% of the sale price. Researching on the internet, I have not seen any further info on this clause. Could anyone give me additional info on this clause with regards to selling a house and leaving the country? Is there any way to get around this clause - renting for a short period of time?

Tue Nov 09, 2004 6:38 pm

Hi Jen:

I think what you have seen is a reference to withholding tax which is payable by a non resident alien on the disposition of real property. Under that case, tax is withheld to deal with a possible tax liability from the sale.

This withholding tax may be reduced to a smaller amount, or nothing at all by having the non resident alien apply for a certificate to have tax withheld only on taxable profits.

Regards,

Mark T. Serbinski, CA, CPA

MarcLeonard · Post by **MarcLeonard** » Mon Nov 15, 2004 10:55 pm

Hi,

Purchasing a property does not show intent to establish permanent residence, just the intent to establish a residence. You can always sell the property and leave the country at any time.

I'm a fellow Canadian who's lived in the US on TN and H1B visas, and I now work as a mortgage broker. TN and H1B holders are completely elibile for mortgages, but the rules are a little more strict than for US citizens. The key is to work with someone who understands your visa status, and which lenders are more accepting of that status.

Please feel free to contact me with any questions as my company can finance loans throughout most of the US and I'm very familiar with the requirements for Canadians. Whether you've been here for decades or just crossed the border yesterday you are eligible for the most competitive rates available.

Best Wishes,

Marc Leonard
Toll-free: 866-653-3257
www.MarcLeonard.com

danny · Post by **danny** » Fri Dec 10, 2004 10:56 am

far easier and less stressful to buy a house after GC than before.