Buying a San Diego Home as an Australian: How the Financing Actually Works

I've written before about what it's like to move from Australia to San Diego and how different the buying process feels once you get here. That post covered the big picture. This one covers the question I actually get asked first, usually within about ninety seconds of meeting an Australian buyer.

"Can I even get a loan here?"

Short answer: almost certainly yes. Longer answer: which loan depends entirely on which of three situations you're in, and the differences are big enough that it's worth sorting out before you start looking at houses.

I'm Australian-born and I sell real estate in San Diego, so I've watched a lot of Aussies go through this. Here's how it actually works.

First, work out which buyer you are

American lenders don't think in terms of nationality. They think in terms of residency, income source, and documentation. Australians land in one of three buckets.

Bucket one: you're living in San Diego on a work visa. E-3, L-1, H-1B, O-1, or you've got a green card. You're earning US dollars and paying US tax.

Bucket two: you're still in Australia, or you're here but not earning US income. You want a holiday home, an investment property, or a place to land in later.

Bucket three: you're paying cash.

Each bucket has a different path.

Bucket one: living and working here

If you're on a visa with a Social Security Number and US income, you can usually get a normal American mortgage. Same 30-year fixed products, similar rates, similar down payments.

Two things trip people up.

The first is the Social Security Number itself. An ITIN, the tax number issued to people who aren't eligible for an SSN, is not a substitute when it comes to conventional financing. Some lenders run dedicated ITIN loan programs, but they're a narrower product with different pricing. If you're eligible for an SSN, get one early. It's the single thing that opens the most doors.

The second is your credit file. Your Australian credit history does not follow you. You can have a spotless twenty-year record with a Big Four bank and arrive in the US with no score at all. Lenders call this a thin file, and it can stall an application even when your income is strong.

The fix is time, so start early. Get a US credit card, even a secured one, the week you arrive. Get your name on utility accounts. Six to twelve months of activity is usually enough to generate a usable score. Some lenders will also build a non-traditional credit file from rent, utility and insurance payments if you can document twelve months of them.

One more thing worth raising with your lender: some have overlays for non-permanent residents, particularly around how much visa validity they want to see remaining. It rarely kills a deal, but it's better to know upfront than to discover it in underwriting.

Bucket two: buying from Australia

This is where the specialist products come in, and it's the part most Australians don't realise exists.

There is no federal rule stopping an Australian from owning US residential property. You don't need a visa, you don't need residency, and you don't need to be in the country. What you need is a lender who writes foreign national loans.

The most common product for an investment purchase is a DSCR loan, short for debt service coverage ratio. Instead of underwriting you, the lender underwrites the property. They look at what the place will rent for, compare it to the mortgage payment, and lend against that ratio. No US tax returns, no US credit score, no W-2, no employment verification.

What to expect in the current market:

Down payment of roughly 25 to 30 percent for most files. If the rental income doesn't comfortably cover the payment, that can climb to 35 or 40 percent.

Rates meaningfully above what a US resident pays. Foreign national and DSCR pricing has generally been running from the sevens into the low tens through 2026, against conventional owner-occupied rates that sit well below that. Interest-only periods are often available and change the ratio maths considerably.

Documentation that's different rather than lighter. Expect to provide your passport, an Australian credit report, twelve to twenty-four months of bank statements, clear evidence of where your deposit came from, and sometimes reference letters from your Australian bank. If the property is going to be a genuine second home rather than a rental, ask about foreign national second-home programs as well. They underwrite differently to DSCR and the terms are sometimes better.

The currency question nobody plans for

Your deposit is in Australian dollars and your purchase is in US dollars, and the exchange rate will move between the day you go into contract and the day you close.

On a San Diego purchase, a few cents of movement in the AUD/USD rate can swing your deposit by tens of thousands of dollars. That is not a rounding error.

Two practical points. First, use a dedicated foreign exchange provider rather than a straight bank transfer. The spread is usually better and on these amounts the difference is real money. Second, talk to that provider about locking a rate, or converting in tranches, once you're in contract. Escrow will not wait for a better rate.

Budget the time as well. International wires need to clear before closing, and "the money is on its way" does not record a deed. Get funds into a US account earlier than feels necessary.

How you take title matters, and it's not a real estate question

Personally, jointly, through an LLC, through a trust. Australians ask me this constantly and it is genuinely not my call to make. The answer depends on your Australian tax position, your US tax exposure, your estate planning, and whether the property is a home or an investment.

What I will say is that it's far easier to decide before closing than to restructure afterwards. Get a cross-border CPA involved early. Firms that handle both Australian and US tax exist and are worth what they charge.

FIRPTA: the bit that surprises people on the way out

When a foreign person sells US real property, federal law generally requires the buyer to withhold 15 percent of the gross sale price and remit it to the IRS. California adds its own withholding on top, currently 3 1/3 percent, collected by the Franchise Tax Board.

Read that again, because the detail that stings is "gross sale price," not "profit." On a $1.5 million sale that's $225,000 federal plus $50,000 state held back at closing, whether or not you made a dollar on the deal. It is a prepayment, not a tax. You file a US return, your actual liability gets calculated, and you're refunded the difference. But that can take many months, and in the meantime the money isn't yours to use.

There are ways to reduce it. You can apply to the IRS for a withholding certificate before closing if your actual tax liability will be lower than the amount to be withheld, and exemptions apply in certain circumstances. Both require planning ahead of the closing rather than after it.

This is exactly the kind of thing to raise with a CPA at purchase, not at sale. The structure you buy in affects what happens when you sell.

A couple of San Diego specifics

Property tax here is based on your purchase price, and the assessment resets when you buy. Budget somewhere around 1.1 to 1.25 percent of the purchase price annually, depending on where in the county you land and what bonds apply. Then expect a supplemental bill after closing that catches up the difference between the old assessment and yours. It arrives months later and blindsides almost every first-time California buyer.

And if the plan is to rent the place out short-term, check the licensing rules before you write an offer, not after. Not every San Diego property can legally operate as a vacation rental, and the ones that can aren't spread evenly across the city.

Where to start

Talk to a lender who has actually closed foreign national files, before you fall in love with a house. Get a written pre-approval or proof of funds. Talk to a cross-border CPA about structure. Then start looking.

The financing is very rarely the reason an Australian doesn't end up buying in San Diego. Not knowing which questions to ask, early enough, usually is.