Yes, a Canadian can get a mortgage in the US. Most Canadian buyers finance through a specialized “foreign national” mortgage program, put down 20 to 35 percent, obtain an Individual Taxpayer Identification Number from the IRS before closing, and document their income and assets in U.S. dollars. The loan itself is only part of the picture: owning U.S. real estate also creates U.S. tax filing obligations when you rent the property, sell it, or pass it to heirs.
Which Loan Programs Are Open to You
There are two broad categories of mortgage you might pursue, and only one is realistic for most Canadians living in Canada.
Conventional loans backed by Fannie Mae or Freddie Mac generally require the borrower to be legally present in the United States. Fannie Mae’s selling guide requires the lender to warrant that a non-U.S. citizen borrower is legally present in the country.1Fannie Mae. Non-U.S. Citizen Borrower Eligibility Requirements If you live in Canada with no U.S. immigration status, you generally will not qualify. Canadians who hold a valid U.S. visa or green card may be eligible.
Foreign national mortgage programs are built for borrowers without permanent U.S. residency. These loans stay in the lender’s own portfolio rather than being sold to the government-sponsored enterprises, which gives the lender more flexibility on documentation and residency rules. The tradeoff is cost. Interest rates on foreign national loans typically run 0.5 to 2 percentage points higher than what a comparable domestic borrower would pay, and down payment requirements are steeper.
Down Payment, Reserves, and Credit
Plan on a down payment of 20 to 35 percent of the purchase price. On a $400,000 property, that means $80,000 to $140,000 upfront. The funds also need to be “seasoned” — sitting in a verifiable bank account for at least 60 days before you apply, so the lender can confirm the money is yours and not recently borrowed.
Lenders also want cash reserves on top of the down payment: liquid funds remaining after closing, commonly 12 to 24 months of total housing payments (principal, interest, property taxes, and insurance). The reserves give the lender comfort that you can keep paying if your income fluctuates or the exchange rate moves against you.
On the credit side, Equifax and TransUnion operate in both countries, so most U.S. lenders can pull an international credit report that reflects your Canadian credit cards, car loans, and any existing mortgages. A strong Canadian credit profile generally translates to better loan terms. A thin or weaker history may mean a higher rate or a larger required down payment. Some foreign national programs will accept alternative credit documentation, such as bank reference letters or proof of timely rent payments, when traditional credit history is limited.
Identification, Income Documents, and the ITIN
Your Canadian passport is the primary ID. U.S. banks must verify every borrower’s identity under federal Customer Identification Program rules, and a current passport from a recognized government satisfies that requirement.2eCFR. 31 CFR Section 1020.220 – Customer Identification Programs for Banks Some lenders will ask for a secondary ID like a Canadian driver’s license.
For income, expect to produce two years of T4 Statements of Remuneration Paid and your Canadian tax returns. Self-employed borrowers typically submit T1 General returns along with business financial statements. Lenders also ask for 60 to 90 days of recent bank statements to confirm where your down payment and reserves are held.
Every dollar figure on your application — salary, savings, debts — gets converted from Canadian to U.S. dollars. Most lenders use the exchange rate on the application date so the debt-to-income math stays consistent through underwriting.
Getting an ITIN Before Closing
You do not have a U.S. Social Security Number, so you need an Individual Taxpayer Identification Number instead. Federal law requires every person involved in a reportable transaction to provide a taxpayer identification number, and the IRS issues ITINs to individuals who are not eligible for a Social Security Number.3Office of the Law Revision Counsel. 26 U.S. Code 6109 – Identifying Numbers Your lender uses this number to report mortgage interest on Form 1098, and you will need it on any U.S. tax return you file.
You apply by submitting Form W-7 to the IRS with your passport (or a certified copy) and supporting documents. For a mortgage-related application, you can attach proof of the loan, such as a letter from the lender, under the exception for third-party mortgage interest reporting.4Internal Revenue Service. Instructions for Form W-7 Processing takes about seven weeks, or nine to eleven weeks if you file between mid-January and the end of April. Start the W-7 well before your expected closing so the number arrives in time.
Applying and Closing From Canada
The standard application is the Uniform Residential Loan Application, Form 1003. Once you submit it with your supporting documents, the lender orders a property appraisal and begins underwriting your credit, income, assets, and the property’s title.
Federal rules require the lender to deliver a Closing Disclosure at least three business days before your closing date, listing final loan terms, monthly payment, and fees.5Consumer Financial Protection Bureau. What Should I Do if I Do Not Get a Closing Disclosure Three Days Before My Mortgage Closing? Compare it line by line against the Loan Estimate you received when you applied, and raise any significant differences before you sign.
If you cannot travel to the United States for the signing, most states allow a remote online notarization where you appear on video before a licensed notary and sign electronically. A power of attorney is another option: you authorize someone physically present at closing to sign on your behalf. After signatures are collected, the escrow agent transfers funds to the seller and records the deed with the county.
Wiring Your Funds Across the Border
Moving a large sum from a Canadian bank account to a U.S. escrow account carries costs beyond the purchase price. Outgoing international wire fees typically run $35 to $50, and the receiving bank may charge up to $25. The bigger expense is the currency conversion spread. Banks commonly add 1 to 3 percent on top of the mid-market rate when converting Canadian dollars to U.S. dollars, which on a $100,000 down payment can mean $1,000 to $3,000. International wires generally take one to five business days, so start the transfer well before closing day.
U.S. Taxes You Need to Plan For
Owning U.S. property creates U.S. tax filing obligations even if you never move there. The specific rules depend on what you do with the property.
If You Rent It Out
By default, rental income earned by a nonresident alien is taxed at a flat 30 percent of the gross rent, with no deductions for mortgage interest, property taxes, maintenance, or depreciation.6Internal Revenue Service. Nonresident Aliens – Real Property Located in the U.S. For most landlords, that produces a far larger tax bill than necessary.
You can avoid that treatment by making an election under Section 871(d) of the Internal Revenue Code. The election treats your rental income as connected to a U.S. business, which lets you deduct mortgage interest, property taxes, insurance, and depreciation, and taxes your net income at the regular graduated federal rates.7Office of the Law Revision Counsel. 26 U.S. Code 871 – Tax on Nonresident Alien Individuals You make the election by attaching a statement to your Form 1040-NR for the first year it applies, and it then stays in effect for later years unless the IRS lets you revoke it.
Timing matters. If you do not file your return within 16 months of the original due date, the IRS can deny your deductions entirely and leave you with the 30 percent gross tax.
When You Sell: FIRPTA Withholding
When you sell, the buyer must withhold 15 percent of the sale price and send it to the IRS under the Foreign Investment in Real Property Tax Act.8Internal Revenue Service. FIRPTA Withholding On a $400,000 sale, $60,000 is withheld upfront. It is not a separate tax; it is a prepayment toward your actual tax liability. You file a U.S. return after the sale to calculate the real capital gains tax owed and receive a refund if the withholding exceeded it.
Two exceptions worth knowing. No FIRPTA withholding is required if the buyer intends to use the property as a personal residence and the sale price is $300,000 or less; the buyer must plan to live there at least 50 percent of the days it is occupied during each of the first two years after purchase.9Internal Revenue Service. Exceptions From FIRPTA Withholding You can also apply in advance for a withholding certificate on Form 8288-B to reduce the withheld amount when you expect your actual tax to be well below 15 percent of the sale price.10Internal Revenue Service. ITIN Guidance for Foreign Property Buyers Sellers
The Estate Tax Trap
This is the piece most Canadian buyers overlook. If you die while owning U.S. real estate, the property is subject to U.S. estate tax, and the exemption for nonresident aliens is far lower than for U.S. citizens. A U.S. citizen or resident can currently shield over $13 million. A nonresident alien’s filing threshold is just $60,000.11Internal Revenue Service. Estate Tax for Nonresidents Not Citizens of the United States U.S.-situated assets above that threshold are taxed at graduated rates reaching 40 percent.12Office of the Law Revision Counsel. 26 U.S. Code 2101 – Tax Imposed
For a Canadian who owns a $400,000 home, the estate tax exposure on the amount above $60,000 can be substantial. The U.S.–Canada tax treaty offers some relief, including a proportional unified credit and a special marital credit for transfers to a surviving spouse, but the treaty provisions are complex and do not eliminate the tax entirely. Many cross-border tax advisors recommend that Canadian buyers consider specific ownership structures or life insurance to cover the potential liability. Speaking with a tax professional experienced in U.S.–Canada cross-border issues before you buy is one of the most valuable steps you can take.