Couple celebrates their new Nevada home purchase.

Using Foreign Funds for a Nevada Mortgage: A Guide

Q: What do mortgage lenders mean by 'sourcing' and 'seasoning' funds?

A lender's seasoning period is a mandatory waiting time after you purchase or refinance a property before you can access the full after-repair value (ARV) for a cash-out refinance. Most DSCR lenders require a seasoning period of 6 to 12 months. Refinancing before the seasoning period concludes typically means the lender will base the loan amount on your original purchase price plus rehab costs, which severely limits the amount of equity you can cash out. Waiting until after the period allows you to borrow against the full market value you created through your renovations.

Q: How long should funds for a down payment be in a U.S. bank account?

To justify a higher appraised value, you should provide the appraiser with a detailed and organized renovation packet. This packet removes guesswork and provides concrete evidence of the work performed. It should include: a cover letter summarizing the major upgrades, a detailed scope of work document itemizing all improvements, compelling before-and-after photos showing the property's transformation, copies of paid invoices and receipts for materials and labor, and copies of any official building permits that were issued for the work.

Q: What documents are generally needed to verify funds from a foreign country?

No, LTV limits for cash-out refinances vary significantly among different DSCR lenders, as each has its own guidelines and risk tolerance. While purchase loans may reach 80% LTV, cash-out refinances are often capped at 70% or 75% LTV. The specific LTV offered to an investor is influenced by several factors, including: Credit Score (higher scores typically qualify for higher LTVs), DSCR Ratio (a stronger income-to-debt ratio may result in a better LTV offer), Property Type (a single-family home might receive a higher LTV than a multi-unit property), and Loan Amount (some lenders may offer different terms based on the size of the loan).

Q: Can I use money from selling a property abroad for my down payment?

Your property's monthly rental income is the foundation of a DSCR loan approval. The formula is: DSCR = Gross Rental Income / Total Monthly Housing Payment. A higher rent results in a higher DSCR. This proves to the lender that the property can comfortably support a larger loan payment, which in turn allows you to qualify for a larger loan amount and maximize your cash-out.

Q: Are there special rules for using a financial gift from a relative living abroad?

Yes, it is often possible to pay for closing costs with the proceeds from your new loan, meaning you don't need to bring cash to closing. However, these costs are not added on top of your loan limit. Instead, the closing costs are subtracted from the total cash-out funds available to you after your existing mortgage is paid off. The total loan amount, including these costs, cannot exceed the lender's maximum LTV limit based on the property's appraised value.

Q: What if my financial documents are not in English?

Investors can make several avoidable errors that reduce their available cash-out funds. The most common mistakes include: Poor Documentation (failing to provide an appraiser with a thorough renovation packet can lead to a conservative and lower valuation), Refinancing Too Soon (not waiting for the lender's seasoning period to expire is a costly mistake that forces the loan to be based on cost rather than value), Lacking a Tenant (attempting to refinance a vacant property is less favorable, as lenders prefer the security of a signed lease over estimated market rents), and Ignoring Lender Differences (accepting the first loan offer without comparing options can mean missing out on better LTV limits or shorter seasoning requirements from other lenders).

Q: Is it better to transfer my down payment as one large sum or in several smaller amounts?

The ideal time to begin the refinance process is 30 to 45 days before your lender's seasoning period expires. This allows you to gather all necessary documentation, secure an appraisal, and complete underwriting so that you can close immediately once the seasoning requirement is met. Crucially, by this time, the property should also be 'stabilized,' which means you have a qualified tenant in place with a signed lease and have collected at least the first month's rent.

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TL;DR

When using foreign funds for a home purchase in Nevada, understanding the lender's requirements is essential. This overview covers the critical steps to ensure a smooth mortgage process.

Clear Paper Trail: Lenders are required by anti-money laundering regulations to verify the origin of all funds, necessitating a complete and transparent financial history.
'Seasoning' Period: It is highly recommended to deposit your funds into a U.S. bank account and leave them untouched for at least 60 days before applying for a loan. This 'seasoning' process is a critical step for validation.
Accurate Documentation: Having all necessary documents, such as professionally translated bank statements and properly executed gift letters, is crucial to preventing significant delays or denial of your mortgage application.

Sourcing and Seasoning Funds: What Nevada Lenders Look For

When you apply for a mortgage in the United States, lenders are legally required to verify the origin of every dollar you use for your down payment and closing costs. This process is governed by federal regulations like the Bank Secrecy Act, designed to prevent money laundering. For homebuyers using funds from outside the U.S., this scrutiny is even more intense. Lenders focus on two key concepts: sourcing and seasoning.

Sourcing is the process of proving where your money came from. It's not enough to show you have the cash; you must provide a clear, documented history that demonstrates the funds were obtained legally. This could be from savings, the sale of an asset, or a legitimate gift.
Seasoning refers to the length of time the money has been in a U.S. bank account. Lenders want to see the funds resting in an account that is under your control. This proves the money is yours and not a last-minute, undocumented loan from someone else.

Failing to properly source and season your funds is one of the most common reasons for mortgage delays and denials, especially for international buyers looking at properties in high-demand areas like Las Vegas or Henderson.

The 60-Day Rule: How Long to Season Your Funds

The standard requirement for seasoning funds is a minimum of 60 days. This means your down payment money should be deposited into your U.S. bank account and left untouched for at least two full monthly statement cycles before you submit your mortgage application. The data, information, or policy mentioned here may vary over time.

Why 60 days? This timeframe allows the lender to review two complete bank statements from your U.S. account. If the money has been in the account for that long, it is considered a seasoned asset. The lender will still verify the initial deposit, but the seasoning adds a layer of stability and legitimacy to the funds.

If you apply for a mortgage before the 60-day period is over, the funds are considered 'unseasoned'. This isn't a deal-breaker, but it means you must provide a much more detailed paper trail directly from the foreign source account, which can be a more complicated and time-consuming process.

Pro Tip: The best strategy is to transfer your funds to a U.S. bank account as soon as you decide to start your home search in Nevada. This starts the seasoning clock early and simplifies your mortgage application down the line.

Required Documents for Your Foreign Down Payment

To create a clear paper trail for your lender, you need to assemble a comprehensive file of documents. Being proactive and organized here will save you significant time and stress. Whether you are buying a family home in Reno or an investment property in Las Vegas, the required documentation is consistent. The data, information, or policy mentioned here may vary over time.

A person reviewing mortgage documents at a desk.

Here is a checklist of what you will likely need to provide:

Foreign Bank Statements: At least two months of statements from the foreign account where the funds originated. These statements should show your name and the account number.
Wire Transfer Receipts: The official confirmation document (like a SWIFT confirmation) for the wire transfer from your foreign account to your U.S. account. This receipt should detail the sending and receiving banks, account numbers, and the exact amount transferred.
U.S. Bank Statements: The statement from your U.S. bank account showing the corresponding deposit of the wired funds. The amount should match the wire transfer receipt exactly, accounting for any currency conversion rates and transfer fees.
Letter of Explanation (LOX): A simple, signed letter explaining the transaction. State that you transferred funds from your foreign personal savings account to your U.S. account for the purpose of purchasing a home.

Using Proceeds from a Foreign Property Sale

Using the profits from selling a home abroad is a very common and acceptable way to fund your down payment. However, it requires an even more detailed paper trail to connect the sale to the funds in your account.

In addition to the standard documents, you will need to provide:

A copy of the final sales contract for the foreign property. In the U.S., this is often called a Closing Disclosure or Settlement Statement. You will need the equivalent document from the country where the property was sold.
Proof of the proceeds being deposited into your foreign bank account. The bank statement should show a large deposit that matches the net proceeds from the sale document.
A complete trail showing the funds moving from that deposit, being wired to the U.S., and landing in your American bank account.

An underwriter must be able to follow the money from the property sale directly to your U.S. account without any gaps. The data, information, or policy mentioned here may vary over time.

Special Rules for Gifts from Foreign Family Members

Using a financial gift from a family member living abroad is permitted, but it comes with strict documentation requirements. Lenders scrutinize gift funds closely to ensure they are true gifts and not disguised loans. The data, information, or policy mentioned here may vary over time.

House model and keys on a table, symbolizing a new home purchase.

Here’s what you and your family member will need to provide:

A Signed Gift Letter: This is a formal letter from the person giving you the money (the donor). It must state their name, your name, their relationship to you, the exact dollar amount of the gift, and a clear statement that 'this is a bona fide gift and there is no expectation of repayment.' The letter must be signed and dated by both you and the donor.
Proof of the Donor's Ability to Give: The donor must provide their own bank statement showing they had the funds available to give. This proves the money is theirs and from a legitimate source.
Proof of Transfer: You'll need the wire transfer receipt showing the funds moving directly from the donor's account to your U.S. account.

For example, if your parents in Canada are gifting you $50,000 for a down payment on a home in Henderson, they must provide their bank statement showing they had at least $50,000, sign a gift letter, and provide the wire confirmation for the transfer.

What If My Documents Aren't in English?

This is a critical point that can halt a mortgage application instantly. All documents submitted to a U.S. lender must be in English. If your bank statements, sales contracts, or other official papers are in another language, you must have them professionally translated.

You cannot translate the documents yourself, nor can a friend or family member. The translation must be performed by an independent, certified third-party translator. The translator must also provide a signed 'Certificate of Translation Accuracy' attesting that the translation is true and correct. This translated packet is then submitted to the lender along with the original documents.

Avoiding Red Flags: Large Transfers and Business Funds

How you move your money can be just as important as where it came from. Underwriters are trained to spot patterns that could indicate risky behavior.

Will a Large Wire Transfer Create Problems?

No, a single large wire transfer is actually the preferred method. It is transparent and easy to track. A wire for $100,000 from your foreign account to your U.S. account is straightforward to document with a single wire receipt and a single deposit record.

The primary red flag lenders look for is 'structuring'. This is when someone makes multiple, smaller deposits to avoid triggering bank reporting requirements. A series of small, unexplained cash deposits or transfers will almost certainly be questioned and can jeopardize your loan approval. It is always better to be transparent with a single, well-documented transfer.

How to Explain Funds from a Foreign Business Account

Using funds from a personal business account is possible but is one of the most complex scenarios. Lenders need to ensure that withdrawing a large sum of money will not negatively impact the financial stability of your business.

To use business funds, you will typically need to provide:

Business Formation Documents: Proof that you own the business.
Business Financials: Recent profit and loss statements and balance sheets.
A Letter from a Certified Accountant: This is the most important piece. You will need a letter from the business's accountant confirming that the withdrawal of funds for your down payment is permissible and will not harm the ongoing operations of the company.

This level of documentation is necessary to assure the lender that you are not draining your primary source of income just to secure the home loan. The data, information, or policy mentioned here may vary over time. Navigating the documentation for foreign funds can be complex. Working with a mortgage expert who specializes in unique financial situations ensures every detail is handled correctly from the start. A specialist can help you prepare your file to avoid underwriting delays and secure your new home in Nevada.

The journey to buying a home in Nevada with international funds has its complexities, but you don't have to navigate it alone. If you're ready to take the next step with your financial documentation perfectly prepared, our team is ready to help. Apply now to start the pre-approval process and move closer to your new home.

Author Bio

David Ghazaryan is the expert mortgage strategist and founder behind iQRATE Mortgages. With a mission to fund home loans that traditional banks won't touch, David specializes in helping clients with unique financial situations, including those recovering from foreclosure or bankruptcy. He expertly crafts smart, strategic, and stress-free mortgages by leveraging a vast network of over 100 lenders to secure competitive rates for investors and homebuyers alike. Praised for exceptional customer service, David has helped hundreds of families with a 97% satisfaction rate, guiding them to the mortgage they deserve.