How to Buy a House on OPT

Updated on March 6, 2024

At a Glance

  • OPT allows F-1 students to work temporarily in the U.S. related to their field of study.
  • OPT students are legally eligible to purchase a home in the U.S.
  • Benefits of buying a home on OPT include greater control over living arrangements, building equity, and potential tax benefits.
  • The home buying process is generally the same for OPT students, with the main challenge being securing a mortgage due to limited credit history.

Most F1 students on OPT in the U.S. dream of a long and fruitful life in America. One with a great job and maybe they might even own their own home. But what if OPT students could own that home now? Read on to learn more more about getting a mortgage as an OPT international student in the U.S.!

What is Optional Practical Training?

Optional Practical Training (OPT) is temporary employment that is directly related to an F-1 student’s major area of study. F1 visa students can apply to receive up to 12 months of OPT employment authorization before completing their academic studies (known as pre-completion) and/or after completing their academic studies (known as post-completion).

The purpose of OPT is to offer international students on-the-job practical experience to carry forward with them to their future employment, whether it be in the U.S. or aboard.

Can Immigrants on an OPT Buy Homes in the U.S.?

A popular question for international students on OPT concerns their ability to purchase a home in the U.S. For many, the hoped-for trajectory is to complete their OPT and studies and then procure a job that will lead to an H1B visa and then, eventually, to a green card. And with these long-term goals in mind, many OPT international students want to know if they can buy a home in the U.S.

The answer is “yes”.

Any legal resident (visa holder or otherwise) of the U.S. is able to purchase a home. That said, it will be a more daunting process for an OPT international student than it would be for a proper U.S. citizen. Still, it is possible, and it’s a worthwhile investment.

Should OPT Students Buy Homes in the U.S.

As with every kind of major purchase, there are pros and cons to buying a home in the U.S. But in the case of an OPT student buying a home, the pros outweigh the cons. Some of the benefits, but not all, include:

  • Having more agency of your living arrangements while in school
  • Building equity, and therefore more buying and investing power later
  • Getting significant tax benefits if you sell your home

These are just a few of the numerous perks that come with owning a home in the U.S. So, if you want to own a home in the U.S., how do you go about it?

How to Buy a Home on an OPT in the U.S.

The home buying process for immigrants, visa holders, and international students on OPT in the U.S. is more or less the same as it is for U.S. citizens. This process is well-documented in many other places, but at a glance, these are the steps:

  1. Determine how much you can afford to spend on a house
  2. Get Pre-approved for credit for your Mortgage
  3. Find the right Real Estate Agent
  4. Shop for a Home
  5. Make an Offer
  6. Get a Home Inspection
  7. Secure the Mortgage
  8. Obtain insurance and establish utilities
  9. Close the deal

But while it’s true that the process is pretty much identical for visa holders and U.S. citizens, it’s in the second step, involving securing a mortgage, that most international students on OPT, most visa holders in general, will have the most trouble.

The truth is, due to lack of credit history in the U.S. (and other factors that apply specifically to visa holders), OPT students will need to be smart about how they secure a mortgage in the U.S.

Is There Such a Thing as an OPT Mortgage Loan?

There are no mortgages designed specifically to be “OPT mortgage loans” in the U.S. That said there are options available to OPT international students.

Both FHA loans and mortgages from big banks are viable options for people on OPT who need a home loan, but these options are not without their difficulties for visa holders. You’ll be required to have a social security number, which not all immigrants have. You’ll also need a U.S. credit history and credit score, which, again, not all visa holders will have. Lastly, you’ll find that many lenders are risk-averse and that they find lending to visa holders, whose time in the U.S. is bound to their visa status, are high-risk.

Still, while it’s not possible to get a specific OPT mortgage, there are options available to you. And, yes, it will be more difficult for a visa holder to get a mortgage loan, there are ways to make yourself less of a risk to lenders and one of the ways to do that is with a strong down payment.

Tailoring Your Down Payment Approach on Optional Practical Training

For international students and recent graduates on Optional Practical Training (OPT) in the United States, the dream of owning a home can seem like a distant prospect. Yet, with proper planning and understanding of financial products, even those on OPT can navigate towards securing a personal loan for a mortgage down payment. Here’s how you can position yourself to take out a personal loan for this significant step in your life journey.

Understand Your Visa Implications

First and foremost, it’s essential to understand how your OPT status impacts your ability to secure a loan. OPT is a temporary work authorization that typically lasts for 12 months, with a possible 24-month extension for STEM graduates. This limited duration can make lenders hesitant due to the perceived risk of loan default should you leave the country.

Building a Credit History

Your credit history in the U.S. will significantly affect your loan eligibility. Start by using any credit cards responsibly, paying bills on time, and keeping debt levels low. If you don’t have a credit history, you might want to look into secured credit cards or credit-builder loans.

Employment and Income Stability

Lenders will look at your employment history and income stability. As someone on OPT, having a job in your field of study can serve as an advantage. Prepare to show proof of employment and income, including your job offer letter, pay stubs, and bank statements.

Short-Term vs. Long-Term OPT Considerations

When you’re on OPT, you need to consider your visa’s expiration date. If you are on a standard 12-month OPT, it might be difficult to secure a long-term loan. However, if you are on a STEM OPT extension or in the process of transitioning to an H-1B visa or another longer-term status, lenders might be more willing to consider your application.

Searching for the Right Lender

Not all lenders are familiar with the OPT program or comfortable lending to individuals on a temporary visa. Look for lenders who have experience working with non-residents and understand the nuances of your situation.

The Terms of the Loan

For those on OPT, it’s critical to find a personal loan with terms that match your circumstances. Consider loans that offer flexibility in repayment and do not penalize you for paying off the loan early, especially if your OPT status changes and you decide to leave the country.

Calculate the Risks

Take a personal loan only if you are confident in your ability to repay it. Consider worst-case scenarios, such as what happens if you cannot extend your OPT or transition to another visa. Ensure you have a backup plan to cover your financial obligations.

Transparent Communication with Lenders

Be transparent with lenders about your OPT status and future plans. Some lenders may have specific products or advice for individuals in your situation, and clear communication can lead to better service and product offerings tailored to your needs.

Read More

The Wrap Up

If you’re an OPT international student in the U.S. and you’re planning (or hoping, at least) for a long future in the U.S., it absolutely makes sense to invest in owning your own home.

And while there’s no such thing as an “OPT mortgage loan”, there are plenty of options available to you as an international student on OPT.

Your chances of owning a home will be even greater if you can make a sizable down payment on your mortgage. But luckily, there are companies like Stilt to help increase your chances of securing a home loan.

So, what are you waiting for? Get started today!

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