A Quick Guide to Obtaining a Canadian Business 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 obtain commercial financing or a mortgage. Certainly buying commercial property in the US presents its own challenges if you are not a US citizen but a Canadian. According to a survey by the National Association of Realtors (NAR), more than half of real estate transactions are made with cash in the US.
However, commercial mortgage lenders are willing to extend credit to Canadian citizens on attractive terms. Sometimes these lenders even extend credit without a US credit history. Getting a business mortgage depends on the Canadian citizen’s residential status. Canadian borrowers can be classified into the following categories based on their residential status.
- Non-permanent residents with a valid work visa (G1-G4, E1, E2, H1B, L1, H3, H2B and H2A)
- Permanent Residents with Green Card (form 1-551)
- Foreign citizens whose residence is not in the US
mortgage payment
If you are a Canadian citizen looking to buy a commercial property in the US, be prepared to pay more for your commercial mortgage as US mortgages are calculated monthly compared to commercial mortgages in Canada which are calculated semi-annually. In addition to this, there may also be tax deductibles in the United States for your Permanent Residents. Whereas there is no such tax deductible available to Canadian citizens interested in purchasing commercial property in the United States by obtaining commercial mortgage financing.
How to apply for a Canadian citizen mortgage?
Canadians can apply for a US business loan remotely via email or phone, if they don’t mind some long distance charges. Most lenders and brokers strongly recommend that Canadian citizens have a US business bank account through an ITIN (Individual Tax Identification Number) to facilitate financing and transfer of down payments 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 finances in all 50 US states. For maximum customer satisfaction, such transactions close in 30-45 days. Closing on a Canadian citizen’s mortgage must be done in person in the United States, preferably at the offices of commercial loan lenders.
Documents necessary for the processing of mortgages?
- Legible copy of valid Canadian passport
- Copy of Canadian credit history report
- Legible sales contract fully executed and signed by all parties Verification of funds or deposit
- 3-month bank statements showing you have sufficient funds for a purchase
- Personal financial statement indicating assets and liabilities
- Personal Banker and CPA Professional Reference Letter
- Sponsor bio or resume describing previous ownership and experience managing such a sizeable investment
- property if it is more than $1M.+ investment
- Real Estate List of Existing Real Estate Property in the US or Canada
- Copy of US Individual Tax Identification Number
- Copy of earned money deposit or escrow letter
- Canadian primary residence
the final thought
Many business loan brokers and home loan companies in the US offer business loans to Canadian citizens after verifying their financial history, residency status, and employment history.