Topics Covered:
How to build an alternative credit profile with no US credit history
Portfolio loans for self-employed or 1099 contractors
Foreign national loans for those earning an income abroad
Buying a home should be simple: some savings for a down payment, income from a job, you find a house and get a loan. But conventional lending guidelines assume a fairly specific borrower profile: steady W-2 income, two years of tax returns, an established US credit history. If your situation looks different, a conventional lender may decline to lend even when your finances are logically sound.
As a real estate agent, I've spent years building a relationship with lenders who could fund home purchases when a client does not check standard mortgage boxes. If you're new to the US, newly self-employed, or earning an income abroad, here are some non-conventional lending options available.
1. New to the US with no US credit history: Build an alternate credit report
No US credit history does not always equate to not getting a mortgage, but it does create a major hurdle in standard lending. This situation is common among recent immigrants, returning expats, or those who simply avoid debt. The underlying issue is automated underwriting: the algorithms rely heavily on credit scores to assess risk; thus, a missing score often leads to an automatic denial. However, non-traditional credit documentation and manual underwriting provide viable pathways to approval. Borrowers would simply navigate a human review process rather than an automated one.
Take a person who has just moved from Europe to Boston for work. This person would not have a US credit score without a prior history of borrowing within the US, but can produce consecutive months of on-time rent payments, renter's insurance premiums, and utility bills. That gives the lender something to work with, but they still need to confirm which accounts meet the programās requirements. There are lenders that can build an alternate credit report from such documented payment history, which can then stand in for a traditional score. The trade-off: down payment requirements are typically higher at upwards of 15%.
This also applies to US credit holders who've lived abroad long enough that their prior credit score has regressed over time. Same fix: a lender could build a fresh credit picture from a travel credit card plus two or three other recurring payments. If you've recently returned to Massachusetts, don't assume that you'll be stuck renting until you've rebuilt your credit score from the 600s - talk to a lender first.
2. Self-employed or recently switched to a 1099: Look into portfolio loans
A portfolio loan is a type of mortgage that is kept in the lender's own portfolio rather than resold to the conventional secondary mortgage market. This gives lenders the room to underwrite based on a set of in-house criteria rather than a checklist that is determined by conventional lending rules.
Such flexibility matters most for two groups I see often:
Recently moved from W-2 to 1099: Recruiters, consultants, healthcare workers, tech contractors... professionals who were on salary until they shifted to contract work. Conventional loans generally require two years of 1099 history before counting the average of that income, which leaves these buyers stuck even though their income is often higher than it was on a W-2. A good portfolio lender will instead ask whether the income story makes sense: did this person take a 1099 role because it paid more, even though they had W-2 offers on the table? If so, that's not instability; that's a rational career decision, and it can usually be documented that way with offer letters, contracts, and prior W-2s.
Self-employed borrowers: Conventional underwriting averages two years of tax returns, which can penalize a growing business or legitimate write-offs. Take a consultant whoās run her own LLC for fourteen months. Before that, she spent four years as a W-2 project manager at a software company, then launched a marketing consulting practice. On paper, sheās short of the standard two-year benchmark, and because her new work is in a different field, the exception for shorter self-employment history doesnāt apply to her. But a portfolio lender has more bandwidth to look at the broader picture: bank deposits, business trajectory, and the transferable skills behind her move, rather than declining a loan based on the lack of two years of 1099 tax returns.
3. Earning an income abroad: Look into foreign national loans
This applies if your primary income originates from outside the US. If you live abroad, a true foreign national loan uses international income and bank references to qualify you. If you live here in the US on a visa but earn foreign income without US tax filings, lenders use specialized Non-Permanent Resident programs instead. You'll typically also need an alternate credit report, since your credit history is usually overseas too (see Part 1 on how that's built).
Down payment requirements here are steep - commonly 25% to 40%, trending toward the higher end for thinner financial files, plus enough US-based assets to cover reserves. Not every lender offers this kind of financing, so if you have the capital for a down payment, it's worth exploring this option rather than ruling yourself out.
It's worth noting this is different from a buyer who's already filing US tax returns on foreign-earned income, e.g., an executive in Boston who receives a salary in British pounds from a UK employer but has two years of US returns documenting it. That buyer can often qualify through standard channels, with the income simply translated into US dollars, rather than turning to a specialized foreign national loan.
