Buying a Home on an H-1B: The Mortgage, the Down Payment, and What Happens If You Leave

Your realtor says you qualify. Your bank says you qualify. Nobody in either conversation asks the question that actually matters for you: what happens to this house if your visa doesn’t work out, or if you get the green card and never leave? Here’s the math mainstream homebuying advice skips.

The 60-second version

H-1B holders can get a real, conventional mortgage in the US — Fannie Mae and Freddie Mac both allow lending to non-permanent residents with valid work authorization, typically with a credit score around 620+ and a down payment starting near 3–5% on paper, though most lenders apply stricter overlays for visa holders in practice, so 10–20% down is common. FHA loans, which used to be the easy low-down-payment path, stopped accepting non-permanent residents on new case numbers from May 2025 onward — conventional is now the main route. The real decision isn’t “can I get approved,” it’s whether buying beats renting once you price in the real chance you leave: transaction costs (5–8% round trip) and FIRPTA withholding (10–15% of the sale price at closing, refundable if your actual tax is lower) both make an early exit expensive, while renting the place out from abroad defaults to a blunt 30% withholding on gross rent unless you file an election to be taxed on net income instead.

Can you actually get a mortgage on an H-1B?

Yes, and this is more settled than most visa holders assume. Fannie Mae and Freddie Mac guidelines explicitly permit conventional loans to non-permanent resident aliens who have valid work authorization (your H-1B approval notice and EAD/visa stamp) and a Social Security number. You’ll typically need: two years of US work history (sometimes waivable with strong foreign work history plus at least one US pay stub), a US credit history — even a short one, built through a secured card and on-time bills — and income that a lender can verify through W-2s and pay stubs.

What changed recently: in March 2025, HUD issued Mortgagee Letter 2025-09, removing FHA-insured loan eligibility for non-permanent resident borrowers, effective for FHA case numbers assigned on or after May 25, 2025. FHA loans were popular precisely because they allowed down payments as low as 3.5% with looser credit requirements — that door is now closed for H-1B and similar visa holders. Conventional loans (Fannie Mae/Freddie Mac) remain open, with down payments technically starting near 3% under certain first-time-buyer programs, though in practice many lenders layer on their own stricter requirements for visa holders — a larger down payment, a longer credit history, or a higher score — so budget for something closer to 10–20% down unless you shop around. Rates for H-1B borrowers are not legally allowed to be higher purely because of visa status, but 30-year fixed rates move with the broader market — check a current rate quote rather than relying on a number here, since they change week to week.

The math: buying only pays off if you stay long enough

Buying a home has large fixed costs on the way in and the way out — typically 2–4% of the price in closing costs when you buy, and 6–8% when you sell (agent commissions, transfer taxes, title fees). Those costs don’t shrink because your stay was short; they just get amortized over fewer years, which is why timeline matters more than almost anything else in the decision.

The numbers above are illustrative, not a quote for your market — run your own local price, rate, and rent comparison before deciding. But the pattern holds broadly: most homeownership breakeven calculators land somewhere between 4 and 6 years of staying put before buying beats renting, once you include realistic transaction costs on both ends. If your visa timeline is genuinely uncertain — a pending green card case with no priority date in sight, or a role that could be eliminated — that breakeven window is the number to weigh against your odds of still being in that house.

If you leave and sell: FIRPTA is a withholding, not your final tax bill

This is the most misunderstood part of leaving with a house still in your name. The Foreign Investment in Real Property Tax Act (FIRPTA) requires the buyer to withhold a percentage of the gross sale price at closing whenever the seller is a “foreign person” for tax purposes — which typically includes anyone who is a nonresident alien at the time of sale (a status you likely trigger once you’ve left the US and given up US tax residency). As of 2026, the standard withholding rate is 15% of the gross sales price; it drops to 10% if the buyer will use the home as a residence and the price is $1 million or less, and to 0% if the buyer will use it as a residence and the price is $300,000 or less.

Example: you sell for $500,000 to a buyer who plans to live there. The buyer withholds 10% — $50,000 — and sends it to the IRS. That is not your tax bill; it’s a deposit against whatever your actual capital gains tax turns out to be, calculated the following year on Form 1040-NR. If your real gain (sale price minus purchase price, improvements, and selling costs) produces a smaller tax liability than $50,000, you file for a refund of the difference. If you expect this in advance, you (or your closing agent) can apply for a withholding certificate (IRS Form 8288-B) before closing, which can reduce or eliminate the withholding to match your actual expected liability — useful if you’re selling near breakeven or at a loss. Gains on US real property held by a nonresident are taxed at the same rates a US person would pay (ordinary graduated rates, or the lower long-term capital gains rates if you held the property more than a year) — it is not a flat 30% grab. This is a genuinely fiddly filing; loop in a cross-border CPA before your closing date, not after.

If you leave and keep it: renting it out from abroad

Keeping the house as a rental after you move is common, and it comes with its own default tax trap. Once you’re a nonresident alien, the IRS’s default treatment of US rental income is a flat 30% withholding tax on the gross rent — no deduction for mortgage interest, property tax, repairs, depreciation, or management fees. On a $2,700/month rental, that’s about $9,720 a year gone before you’ve covered a single expense, and it’s the property manager or tenant’s job to withhold it.

The fix is an election under Internal Revenue Code Section 871(d): you elect to treat the rental income as “effectively connected” with a US business, file Form W-8ECI with whoever collects the rent to stop the 30% withholding, and then report the rental on Schedule E of Form 1040-NR — deducting mortgage interest, taxes, insurance, repairs, and depreciation like any US landlord, and paying tax on the net profit at ordinary graduated rates instead. For most leveraged rentals, net income after these deductions is far smaller than gross rent, so the election almost always beats the default. Once made, the election stays in effect for future years unless you revoke it. Set this up before you leave, and use a US property manager who understands nonresident-landlord withholding — it is a common point of failure.

A short decision framework

• Green card filed, priority date close, planning to stay 7+ years: the standard American case for buying largely applies to you — build in a normal down payment and treat it like any long-term purchase.
• Genuinely uncertain, could leave in 2–4 years: the transaction-cost math is working against you. Renting keeps you flexible; if you do buy, plan explicitly for the FIRPTA and rental-withholding mechanics above rather than discovering them at your closing table.
• Planning to keep the home as a rental after leaving: line up the Section 871(d) election and Form W-8ECI before departure, and confirm with a CPA how the rental income will be taxed in your destination country too — double taxation is avoidable, but not automatic.
• Selling on the way out: ask about a Form 8288-B withholding certificate if your expected tax is well below the standard FIRPTA withholding — it keeps more cash in your pocket at closing instead of waiting on a refund.

Common myths, quickly

• “Visa holders can only buy in cash.” False. Conventional mortgages are explicitly available to non-permanent residents with work authorization.
• “FHA loans are still the easy low-down-payment option for H-1B buyers.” False since May 2025 — FHA eligibility for non-permanent residents was removed; conventional loans are now the main path.
• “FIRPTA means I pay 15% tax when I sell.” False. It’s withholding against your actual tax liability, reconciled — and often partly refunded — on your tax return.
• “If my visa lapses, the bank can seize my house.” False. Mortgage default terms depend on payment, not immigration status; you can keep, sell, or rent it regardless.
• “Renting my old house out from India is a legal gray area.” False. It’s routine — just get the withholding election right so you’re not losing 30% of gross rent by default.

Related: if you’re weighing this alongside other decisions on the way out, see The US–India Tax Treaty, Translated into English and The H-1B Holder’s Complete Guide to the 401(k). If you’ll need to move money across borders around a purchase or sale, Sending Money Home: The True Cost is worth reading first. For the numbers on your own situation, delivered weekly, see the newsletter.