Remote work and international employment have made foreign income more common in residential mortgage applications. The documentation requirements differ from domestic income, but agency programs do allow foreign income when it can be properly verified and converted to USD.
What Counts as Foreign Income
- ✦Salary from a foreign-domiciled employer paid in foreign currency
- ✦Self-employment income from a business registered outside the US
- ✦Rental income from foreign property (typically excluded by agency programs unless reported on US tax returns)
- ✦Pension or retirement distributions from foreign plans
Agency Treatment
Fannie Mae and Freddie Mac generally allow foreign income if it can be documented. The income must be converted to USD using the average exchange rate for the qualifying period. Documentation requirements include foreign pay stubs, bank statements showing deposits, an employer letter (translated to English if necessary), and two years of US tax returns if the borrower files them. Most agency programs exclude foreign rental income unless it appears on the borrower's US return.
Non-QM Options When Agency Falls Short
Many non-QM lenders explicitly allow foreign income with bank statements showing USD-equivalent deposits. Foreign national programs accept foreign income with 12 months of foreign bank statements. ITIN borrowers with foreign income who file US taxes are eligible for ITIN mortgage programs, which are available at several non-QM wholesale lenders. For borrowers with no US tax filing history, foreign national or ITIN programs are the most practical path.
Currency Conversion Documentation
Use the IRS average exchange rate for the applicable tax year when converting income. Document the source of the rate used. Bank statements showing deposits in the equivalent USD amount are more straightforward than foreign-currency statements paired with conversion calculations. If possible, have the borrower open a US dollar account and receive their foreign salary deposits there.
Aria knows which lenders explicitly accept foreign income and what their specific documentation requirements are. Ask at vicariointel.com.
7-day free trial. No credit card required.
Ask Aria About Foreign Income Qualification →