Tips for a foreign homebuyer in the U.S.

Dear T.,
There are loads of erroneous assumptions about a foreign homebuyer in the U.S. and the tax-seizure rumor is just one of them.

However, under certain circumstances, your uncle or his heirs may be subject to a 10 percent withholding tax not assessed to U.S. citizens at the time of a resale. He also will be obligated to pay U.S. real estate taxes on the home and will need a U.S. Social Security number or individual taxpayer identification number to rent the place to a tenant or to sell it, and possibly to buy it, as some lenders are now requiring a foreign homebuyer to have one.

Know going in that financing could be a challenge. Mortgage qualification standards are more stringent now than at any time in the recent past, particularly for a foreigner homebuyer. Three years ago, your uncle probably could have gotten a home loan if he could produce 20 percent to 25 percent cash down. Today, ifmortgage money is available from major national banks to a foreign homebuyer, your uncle may need to put at least 40 percent down when buying a home.