Mortgage Update: “Can US Citizens obtain French Mortgages?”

For years France has been a popular vacation home destination for many Americans. Popular areas are the chic, central districts of urban Paris or real estate along the crystal-blue waters of the Mediterranean coast. Also popular are châteaux and manoirs in the Loire Valley and South West France.

At the time of writing, we are in the midst of a global pandemic with an impending recession. These are likely to have – and indeed in some cases already are having – an effect on mortgage providers appetite to lend to international buyers. That being said, even with a tightening of lending criteria, there are still many options available, including extremely-attractive long-term fixed rate products.

It is true to say that certain French lenders have shown caution when it comes to understanding and processing US tax documents. This is due to the FATCA reporting regulations, where banks have to declare everything to the US tax service. It can be challenging and time-consuming (which eats into their margins, making it less attractive) for banks to get involved with financing US citizens or US tax payers.

Whilst it is difficult, it is not impossible, and a good mortgage broker should be able to find options if you wish to go down the financing route. Don’t be put off!

Whether our lenders/brokers will be able to help US citizens or US taxpayers depends on the quality and merits of each file (i.e. the client’s overall personal financial profile and property valuation).  As a general rule of thumb, we find that lenders will consider the following scenarios:

• Employed, good quality financial profiles: minimum loan €200k-€250k
• Self-employed (3 years proof), good quality financial profiles: minimum loan €300k+

In a challenging climate, lenders are looking for strong and uncomplicated financial profiles and backgrounds. French lenders can be very…binary. Introduce any elements which are ‘out of the ordinary’ or which require lots of caveats and explanations, and the chances of getting a mortgage over the line diminish rapidly.

The regions the banks are most comfortable with in these cases are the Alps, Cote d’Azur and Paris. Bottom line, this comes down to a question of risk profile for the lender. They are exposed to less risk if you are buying a renovated or new apartment or villa with strong resales values than buying a wreck of a château in rural France!

If you are a US citizen or US taxpayer and would like to discuss your options, please don’t hesitate to get in touch: [email protected]