The first method of creative financing for non-citizens is builder financing. For instance, in the government-backed tourist region of Rio Grande do Norte, around the city of Natal, the Brazilian government is luring homeowners by giving builders incentives and financing. Typical financing arrangements under this category might involve a percentage down payment, regular interest payments, and a balloon payment after five years.
Another option is securing a mortgage in your home country—most likely the US—and using US-based assets as collateral. While this is one of the easiest ways to finance a home in Brazil, it does require considerable assets.
Many Brazilians use seller financing, which has various forms but typically involves a large down payment, payments over five years, and a large payment at the end. It is also possible to procure a mortgage from a Brazilian bank, which typically involves high interest rates over five to 20 years. Since these mortgages are held in Brazil, they must be paid in the Brazilian currency, which is quickly appreciating. In addition, non-citizens must obtain a permanent visa before qualifying for this mortgage scheme.
Finally, buyers can consider opening a credit line at a bank. For most buyers, this will be sufficient to buy a beautiful piece of oceanfront land.
Brazilian banks are anticipated to debut more creative options for non-resident mortgages in the near future. For now, the best way to buy is with cash, so that when banks broaden access to mortgages and property speculators flood into the country, you can watch your investment gain value while you sit on the beach.
Call Michael Greene at the Brazil Property Group for more information about buying tropical property.
