Does buying house on H1B Visa in USA make sense?

Buying house on H1B visa is risky. Break even in 5 yrs. Home price drops in US fast based on city, jobs, economic conditions. Buy used house for investment.

Written by Anil Gupta
  By Anil Gupta          Updated  8 Jan, 20


Should I buy home without worrying about the un-certainty attached to H1B visa?

Buying house on H1B visa is a long term decision and depends highly on your base location/ City.
It may or may not be always be the best investment due to the high property taxes.

Some locations like Boston, New York City, and Bay area (in California) are extremely expensive to buy a house, but may be able to give you a profit when you sell your house.

But, other locations, like Dallas (Texas), Tampa (Florida), Raleigh (North Carolina) may not be fruitful as they all have land available to expand horizontally. More ground area is generally responsible for low price appreciation for housing market.

If you do not stay in the house for at-least 5 years, it would be really difficult to even break even the money you may have spent (think of maintenance, home insurance, property taxes, monthly EMI).

We are hearing a lot of people on H1B are a bit scared now to sign for Home Mortgage after recent USCIS policy changes to allow forceful deportation (NTA) and H4-EAD work permits being stopped (Almost confirmed).

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Can H1B visa holder buy home with 5% down payment?

You can buy house in USA with H1B visa by paying only 5% down payment.
Many people that we spoke to, have informed us that even though they are buying a new house and taking mortgage, they are only putting in 5% as down payment.
This too, when they can actually pay 20% and avoid the PMI insurance.

They are basically trying to keep as much money with them as they can, in the highly un-stable environment when your H-1B extension / Amendment or Transfer can be rejected without ever issuing an RFE!

Do H1B worker still owe money to Bank Mortgage if visa is denied?

You owe money to bank as long as you own the home. The visa denial does not relieve you from the responsibility of paying back the home loan in USA.

What can happen if your H1B extension is cancelled and you have mortgage to pay?

You have to keep paying the mortgage installment, home insurance, maintenance and property taxes even if your H1B extension is denied.

It does not matter how you pay it. Bank want their money back and government want their taxes.

If you have to go back to your native country immediately in case of H1B extension cancellation, there are not much options available to you. You have to follow the immigration law and leave the country immediately.

Can I rent my House if I have to Go Out of USA due to H1B Denial?

You can rent out the home even though you are not physically present in USA. This is allowed legally.
If you do NOT want to rent, then you should sell it unless you have enough savings to pay monthly bills to keep that house and keep paying monthly EMI.

How can we sell a property in US from home country?

You can use a power of attorney in favor of your friend or relative in USA to sell the house.

Can we get B1/B2 visa for selling house in USA after H1B denial?

You can apply for B1/B2 visa with a reason to sell your property in USA.
That’s a legitimate purpose but, the visa may or may not be given based on the visa officer’s analysis of your case.

What happens to credit history if not able to pay off my Mortgage?

Your credit history will certainly take a big dip and you will have problems fixing it in future (if at all, you come back to USA on work visa).
Your house will be taken over and foreclosed by bank.

Is Short Selling House a Good Idea?

You may have to short sell the house at a much lower price if you want to leave the country quickly.

If, the H1B extensions are indeed cancelled sometime in future, there is a good chance that housing market will collapse.
You might just loose all the value if you have to go back.

Nevertheless, you can appoint an agent in USA (legally allowed) to arrange for tasks like initiate, conduct, or finalize the sale of property.
You do not have to be present in the United States physically.

The final sale agreement that need your signature can be sent to you wherever you might be (like India or China), and signed there and sent back to USA.

Buying house on H1B visa – Safe range?

After speaking to more people who are currently working on H1B visa, I have come to the conclusion that staying below 350k mark is a safe zone, if you really want to go ahead with buying decision.

Demand for houses above 350k mark normally goes up when economy is doing good but DROPS substantially after the economic downturn.
Selling, in case your visa extension gets rejected may result in losses.

So, it is advisable to stay within budget and controllable mortgage payments (like less than $2k per month) that you can easily manage even from your home country job.
Try to stay away from a future situation that may force you to short sell your house when you are not able to pay monthly property taxes + mortgage payment, as it is too high to support from your home job.

Do you have any experience to share? Your opinion is most welcome and appreciated in the comments section below.


   9 Useful Questions & Answers from comments

  1. SB
    SB 8 Jan, 20 at 1:41 pm

    Its a huge risk to buy a home without having EAD or Greencard. Unless you are a full time employee for a company.

  2. Felipe Salamanca
    Felipe Salamanca 21 Jul, 19 at 12:04 am

    This is a very good post! I think this is a very common question from professional immigrants that come to work to the US.

    From my own experience, this would be my recommendation: if you are in your first H1B visa, dont do it; if you are in your second H1B visa consider it, if you are waiting for your green card, i think it is a good option.

    As the H1B visas lasts for 3 years, you could wait to your third year to make a decision. At that moment, your employer has to make a decision if they want to renew your visa or not so that will give you some clues about the best strategy.

    The first 2 years you can use it to save for the ideal 20% down payment, understand the culture to make sure that you want to stay and investigate about the house market in the area.

    There will be always exception to any rules like good investment opportunities, too expensive renting or family needs so those need to be considered as well.

    • Anil Gupta
      Anil Gupta 21 Jul, 19 at 6:27 pm

      Thanks for your suggestion. You have put forward a very good point.

  3. shreyas rai
    shreyas rai 26 Nov, 18 at 7:06 pm

    So what is the recommended down payment to buy in H1-B visa? You mentioned most of them prefer to put 5% considering they have to short sell in future ?

    • Anil Gupta
      Anil Gupta 26 Nov, 18 at 7:12 pm

      Yes, the sentiment in H1B community is not good.
      If you are not working on a direct client payroll, you should be careful.

      People usually ry to keep down payment at minimum like 3% to 5% based on their financial health and risk taking ability.

      Think of situation where you may have to leave USA abruptly within 10 days or how will you manage if you have to sit at home and look for new H1B job.
      In these cases, you should have at-least 4 months of back in your account to pay for mortgage, property tax, insurance and maintenance to avoid short selling.

  4. Chintan
    Chintan 15 Nov, 18 at 10:05 pm

    What if I am not in country..I manage to sell US home via agent….What happens to money that I get after selling home…Can I direct deposit it in my Indian bank account or do I need to go through US bank account (which will be hard considering I don’t have any valid state id anymore)

    • Anil Gupta
      Anil Gupta 16 Nov, 18 at 8:08 am

      I do not have any experience with selling the house but, the money you get is your money and you can take it with you anywhere.
      It depends on how the buyer in USA is paying you. Most probably, the buyer will take bank mortgage and bank would pay you the via direct deposit to bank account or cashier check.
      In both cases, you will have to en-cash it in dollars first and then transfer to India.
      Just like when people sell house in India, they can easily bring it to USA and convert to dollars.

    • Soma Preciado
      Soma Preciado 27 Feb, 19 at 2:47 pm

      There are a lot of investors in the U.S. who themselves live outside the country and collect rental income. Their properties are manage by property management companies. So
      as long as you pay your taxes after selling your home (even if it is long distance), you can get your money in India. The idea would be to make sure that you have spoken with your bank and made arrangements ahead of time to smooth out the process. Sometimes people give power of attorney to someone who handles the selling of the transaction to make things easier. The title company will be able to advise you on that.

      • Anil Gupta
        Anil Gupta 27 Feb, 19 at 4:27 pm

        Thanks for sharing the details. I appreciate it.