Renting or Buying a Home in the USA: A Newcomer's Guide
Finding a home in the United States revolves around one thing newcomers lack: a US credit history. Landlords and mortgage lenders both rely on it, and leases, deposits and closing costs all work differently from most other countries. This page explains how renting works, what buying really costs, what foreign buyers should know, and the mistakes that catch new arrivals out. For the wider budget picture, see our guide to the cost of living.
This page provides general information only and does not constitute legal, financial or real estate advice. Laws, fees and prices vary by state and city and change over time; confirm the details with a local professional.
Renting
The Lease
The standard lease runs 12 months. Shorter terms and month-to-month agreements exist, usually at a higher rent. Leaving early typically means paying a fee or covering rent until a new tenant arrives. Read the clauses on pets, subletting, repairs, renewal and notice before you sign, because a US lease is a binding contract.
The Application
You usually pay a fee for each adult, often $30 to $75, so that the landlord or manager can check your file. Expect three checks:
- Credit: your credit report and score.
- Income: gross monthly income of around three times the rent is a common rule. In New York City, many landlords ask for annual income of 40 times the monthly rent.
- Background: rental history, and often a criminal check.
The federal Fair Housing Act bars landlords from discriminating on grounds including race, religion and national origin. It does not stop them from applying the same credit rules to everyone.
Renting Without a Credit History
Your overseas credit file normally does not carry over, though a few services can translate credit records from certain countries. Common solutions are:
- A US co-signer or a paid guarantor service.
- A larger deposit, where state law allows it, or several months' rent in advance.
- An employment letter, bank statements and a reference from a past landlord.
- A smaller landlord, who may be more flexible than a large management company.
- A furnished short-term rental for your first weeks, so that you can view homes in person.
Our guide to banking and credit scores shows how to start building a record from day one.
Deposits, Fees and Insurance
- Security deposit: often one or two months' rent. Many states limit the amount and set a deadline for its return, frequently 14 to 30 days after you leave. California, for example, has generally capped deposits at one month's rent since 2024. Record the condition of the home with dated photos on your move-in day.
- Broker fees: uncommon for tenants in most of the country. New York City's FARE Act, in force since June 11, 2025, means that whoever hires the broker pays, which is usually the landlord.
- Renters insurance: many leases require it. It often costs $10 to $25 a month and covers your belongings and liability, which the landlord's policy does not.
- Utilities: electricity, gas, water and internet are often billed separately. See our guide to phone and internet service.
Most rentals are unfurnished. Stoves and refrigerators are usually included, but this varies by region, and a washer and dryer often are not. Check the listing rather than assuming.
Buying
Buying in 2026 is expensive by recent standards. Freddie Mac's average 30-year fixed mortgage rate stood at 7.24% on October 29, 2026, and the national median price for an existing home was close to $430,000 in mid-2026. Both move constantly, and local prices can sit far above or below the national figure.
The Down Payment and Loan Types
| Loan | Minimum down payment | Notes |
|---|---|---|
| Conventional | From 3% | Under 20% down usually means private mortgage insurance (PMI) |
| FHA | 3.5% | Government-insured. Non-permanent residents have been excluded since May 2025 |
| VA | 0% | For eligible veterans and service members |
| Foreign national or ITIN loan | Often 25% or more | Specialist lenders, usually at higher rates |
Most buyers choose a 30-year fixed loan, whose lower monthly payment comes at the price of more total interest. A 15-year loan costs more each month and far less overall. An adjustable-rate mortgage (ARM) is fixed for a set term, often 5, 7 or 10 years, and then moves with the market. Compare several lenders, because even a small rate difference adds up to thousands of dollars.
From Offer to Closing
- Get pre-approved. A lender reviews your finances and states what it would lend. Sellers expect this letter.
- Sign with a buyer's agent, if you want one. Since an industry settlement took effect in August 2024, most buyers working with an agent must sign a written agreement stating the agent's pay. The seller may no longer cover it, so ask. Total commissions have traditionally been around 5 to 6% of the price, and are negotiable.
- Make an offer, usually with an earnest money deposit and conditions for inspection, financing and appraisal.
- Inspect the home. Pay for an independent inspection, then negotiate on what it finds.
- Close. Pay closing costs, usually 2 to 5% of the price, on top of your down payment. They cover loan fees, appraisal, title insurance and escrow or attorney fees.
The Monthly Cost
Your real housing payment is usually more than the loan alone:
- Property tax: paid locally, and from under 0.5% of value a year in states such as Hawaii and Alabama to over 2% in New Jersey and Illinois.
- Homeowners insurance: your lender requires it, and it can be very costly where storms and wildfires are a risk. Flood cover is often separate.
- PMI, if you put down less than 20%.
- HOA fees: condos, townhouses and many subdivisions charge monthly dues, from tens to hundreds of dollars, and enforce rules on things like exterior colors and short-term rentals. Read the rules and the budget.
On taxes, mortgage interest on up to $750,000 of debt is deductible, but only if you itemize, and most households take the standard deduction instead. Our tax guide explains the difference.
If You Are Not a US Citizen
No federal law stops foreigners from buying a home. You can buy without a visa or residency, but that gives you no right to live in the US. Note these points:
- State limits: more than 30 states have some restrictions, mostly on farmland, or on land near military sites. Some, such as Florida and Texas, target buyers from specific countries of concern, including China. Ask a local real estate attorney.
- Financing: without US income and credit, expect a higher down payment or a cash purchase.
- Selling later: under FIRPTA, a buyer must generally withhold 15% of the sale price when the seller is foreign, unless an exception applies. The amount is credited against the tax you actually owe.
- Renting it out: US rental income is taxable, and you need an ITIN to file.
Location Drives Value
Public schools are funded partly by local property taxes, and schools are assigned by address. As a result, near-identical houses can differ widely in price across a district line. Families should check the school before signing, even for a rental; see our page on the school system. Regional gaps are huge too: the price of a small apartment in San Francisco might buy a large house in Indianapolis or Cleveland. Local wages only partly close that gap. Check commuting as well, since many suburbs are built for driving.
Frequently asked questions
Can I rent in the US with no credit history?
Yes, but expect to do more. Offer a co-signer or guarantor, proof of income and savings, or a larger deposit where permitted. Small landlords are often more flexible.
How much do I need to buy a house?
Plan for your down payment, from 3 to 20% or more, plus closing costs of about 2 to 5% of the price and savings for repairs. Foreign buyers usually need more.
Can a foreigner buy property in the USA?
Generally yes, as there is no federal ban. Some states restrict certain buyers or land types, and buying does not give you a visa or the right to live in the US.
Can visa holders get a mortgage?
Often yes, through conventional loans or specialist lenders, if you have US income and documents. FHA loans have not been open to non-permanent residents since May 2025.
Are US rentals furnished?
Usually not. Unfurnished is the norm, and what appliances come with the home varies. Furnished rentals exist but cost noticeably more.
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