A quick example of getting a Canadian commercial mortgage in the US
Owning commercial property in the United States is the dream of almost every Canadian citizen living in the United States. Many of them have no idea how to get commercial financing or a mortgage. Of course, buying commercial property in the US presents its own challenges if you are not a US citizen, but rather a Canadian. According to a study by the National Association of Realtors (NAR), more than half of real estate transactions in the US are done in cash.
However, commercial mortgage lenders are willing to provide credit to Canadian citizens on attractive terms. Sometimes these lenders even give them credit without a US credit history. Obtaining a commercial mortgage depends on the Canadian citizen’s residency status. Canadian borrowers can be categorized into the categories below based on their residency status.
- Non-permanent residents with a valid work visa (G1-G4, E1, E2, H1B, L1, H3, H2B and H2A)
- Green Card Permanent Residents (Form 1-551)
- Non-U.S. resident aliens
If you are a Canadian citizen looking to purchase commercial property in the US, be prepared to pay more for your commercial mortgage as US mortgages are compounded monthly, unlike Canadian commercial mortgages which are compounded every six months. In addition to this, there may also be a tax deduction in the United States for its permanent residents. Whereas there is no such tax deduction for Canadian citizens interested in purchasing commercial property in the United States by obtaining commercial mortgage financing.
How do I apply for a mortgage for a Canadian citizen?
Canadians can apply for a US business loan remotely via email or phone if they don’t mind a few long-distance fees. Most lenders and brokers strongly recommend that Canadian citizens have a US business bank account via an ITIN (Individual Tax Identification Number) to facilitate financing and down payment transfers for closing.
Some of the reputable lenders offer secured mortgages up to 75% loan to value (LTV) at very competitive interest rates. Canadian citizens can take advantage of such finance in all 50 US states. To achieve maximum customer satisfaction, such transactions are completed in 30-45 days. Closing a Canadian citizen mortgage must be done in person in the United States, preferably at the offices of commercial loan lenders.
Documents required for mortgage processing?
- A legible copy of a valid Canadian passport
- Copy of Canadian credit report
- A fully executed legible sales contract that is signed by all parties Funds or deposit verification
- Bank statements for 3 months showing they have sufficient funds to purchase
- A personal financial statement showing assets and liabilities
- Professional letter of reference from a CPA and personal banker
- A biography or CV of the sponsor outlining previous ownership and management experience of such a significant investment
- property if more than $1M.+ investment
- Real Estate Listing of existing real estate owned in the US or Canada
- A copy of the US Individual Tax Identification Number
- Copy of certified cash deposit or escrow letter
- Primary residence in Canada
Many US commercial loan brokers and mortgage companies offer commercial loans to Canadian citizens after verifying their financial record, residency status and work history.
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