Multifamily · Chicago and Seattle · Updated September 2026
Who Handles Commercial Mortgage Financing for Foreign Nationals Buying Apartment Buildings in Chicago IL or Seattle WA?
Banks and portfolio lenders will quote foreign national apartment loans all day. The cheapest route will not, and the reason is one sentence in Fannie Mae's guide that most borrowers never see until the term sheet stage.
By Michael McGovern, Founder | 25+ Years in Commercial LendingCommercial Mortgage Connection · Yonkers, NY · lending in all 50 states The short answer
Banks with international divisions, non-bank portfolio lenders and debt funds all finance foreign nationals buying apartment buildings in Chicago and Seattle. Foreign national apartment loans exist in every one of those channels; what changes is the price and who has to sign.
The honest part first: the cheapest execution on a stabilized apartment building, an agency loan, is usually closed to you, and not for a reason anyone will volunteer. Fannie Mae's Multifamily Guide requires that the Guarantor not be a foreign person, and on Small Mortgage Loans that no individual Key Principal be a Foreign Person. Freddie Mac's Small Balance Loan Guide is the narrow exception: it can approve a Borrower Principal who is not a US citizen, and a foreign guarantor who appoints a US agent for service of process and holds liquidity in a US bank account. Fix that structural question before you shop lenders, because it decides which list you are shopping.
- The rule: under the Small Mortgage Loan requirements, the lender must ensure any individual Key Principal is not a Foreign Person, defined as someone who is not a US citizen, not a lawful permanent resident, and not a US-organized entity.
- Green card changes everything: a lawful permanent resident is not a Foreign Person under that definition, so the agency route reopens. Ask this question first, not last.
- The cities differ at closing, not in the rule: on a $6,000,000 building, a Chicago buyer pays about $45,000 of transfer tax; a Seattle buyer pays nothing, because Washington charges the seller about $179,075.
- Related read: the foreign national mechanics that apply to commercial property generally, including FIRPTA on the eventual sale, are covered in our guide to foreign national commercial real estate loans.
Checked 15 September 2026 against the Fannie Mae Multifamily Guide, the Washington Department of Revenue, the City of Chicago and the Federal Reserve's July 2026 Senior Loan Officer Opinion Survey. Program terms and local rates change; every figure here is a published rate or a worked example.
What this page covers
- The rule that closes the cheapest door
- Who still writes foreign national apartment loans, and on what terms
- What the two cities cost at the closing table
- Three ways to reopen the agency route
- Chicago and Seattle: what else actually differs
- What borrowers can actually control: 4 levers
- What this page will not tell you: three honest limits
- Does this apply in your state?
- Foreign nationals buying apartment buildings: FAQ
The rule that closes the cheapest door
Most articles about foreign national financing start with down payments. That is the wrong starting point for an apartment building, because a threshold question sits in front of it. Fannie Mae's Multifamily Guide, in the Small Mortgage Loan requirements that cover the loan sizes most first-time foreign buyers are shopping, instructs the lender to ensure that any individual Key Principal is not a Foreign Person. The Guide defines a Foreign Person as someone who is not a United States citizen, not a lawful permanent resident, and not an entity organized and existing under the laws of the United States or its states or territories.
A Key Principal, in the same Guide, is the person who controls or manages the borrower, is critical to the successful operation of the borrower and the property, and may be required to provide a guaranty. So the rule is not about who owns the building. It is about who stands behind it. A non-resident investor who forms a US LLC has satisfied the entity half of the question and not the individual half, and that distinction is where these deals stall.
Two consequences follow. A lawful permanent resident is explicitly outside the Foreign Person definition, so a green card holder is not facing this problem at all and should price an agency loan first. And a true non-resident without a US co-sponsor is looking at bank and portfolio execution, which is a real market with real lenders, but a more expensive one. Knowing which of those two you are is worth more than any rate quote.
Who still writes foreign national apartment loans, and on what terms
The lender list below is short and honest. Note that our apartment building loans page covers what each program does generally; this table covers only what changes when the sponsor is a foreign person.
| Lender type | Foreign person as individual Key Principal | What it wants instead | Relative cost |
|---|---|---|---|
| Agency (Fannie Mae, Freddie Mac) | Fannie Mae: not permitted. Freddie Mac SBL: only as an approved Foreign Borrower Principal | A US citizen or permanent resident Key Principal | Cheapest, when available |
| Bank with an international division | Often yes, on relationship and deposits | US accounts, sometimes a deposit pledge, full global financials | Low to moderate |
| Non-bank portfolio lender | Yes, this is the core market | Lower leverage, US entity, reserves held in the US | Moderate to high |
| Debt fund or bridge | Yes, asset-led | A defined exit and meaningful equity | Highest |
Appetite also moves with the quarter. The Federal Reserve's July 2026 Senior Loan Officer Opinion Survey found large banks easing standards on every category of commercial real estate loan in the second quarter, while other banks left multifamily standards unchanged and foreign banks tightened. For a foreign sponsor, that last clause matters: the banks most likely to understand your home-country financials were the group moving the other way.
The building is rarely the problem on these files. The signature block is.
What the two cities cost at the closing table
Here is where Chicago and Seattle genuinely diverge, and it is not the loan. It is who pays the transfer tax. Chicago is one of the few US markets that charges the buyer directly; Washington puts its excise tax on the seller. Same $6,000,000 apartment building, two very different closing statements.
| Item | Chicago, IL | Seattle, WA |
|---|---|---|
| Transfer or excise tax paid by the BUYER | About $45,000 ($3.75 per $500) | $0 |
| Paid by the seller | About $27,000 ($2.25 per $500 across city, state and county) | About $179,075 (graduated state REET plus local) |
| Combined, both sides | About $72,000, or 1.20% of price | About $179,075, or 2.98% of price |
| Where the cost lands for a buyer | Cash at closing, on top of equity | Inside the asking price, because sellers price it in |
Read that table as a modelling instruction rather than a reason to pick a city. In Chicago the $45,000 is cash you must wire, so it belongs in your closing statement alongside equity, reserves and third-party reports. In Seattle you wire nothing, but a seller facing a $179,075 excise bill has priced it into the ask, and you will meet it again as the seller when you exit. Washington's thresholds are adjusted every four years under state law, with new brackets taking effect 1 January 2027, so confirm current figures with escrow. Run your own numbers in the free loan calculator.
Two questions
What is your US immigration status?
Which market?
Three ways to reopen the agency route
1. A US citizen or permanent resident Key Principal. The most common structure. A partner who genuinely controls or manages the borrower takes the Key Principal role and signs the guaranty. The word doing the work is "genuinely": the Guide defines a Key Principal by control and management, not by a signature, and papering someone into the role who does neither is not a structure, it is a problem waiting for a servicing review. Have counsel document the economics.
2. Permanent residency, if it is already in progress. A green card holder is outside the Foreign Person definition entirely. If residency is months away and the deal is not, this is worth raising with your immigration counsel before you commit to a closing date.
3. Accept the bank or portfolio route and structure around it. Perfectly respectable, and often the right answer. Expect lower leverage, a US single-asset entity, reserves held in a US account, and full translated and, where required, apostilled financials from your home country. Our guide on strengthening a commercial mortgage application covers the package; for a foreign sponsor, add the entity formation documents, a US tax identification number and proof of the source of funds.
Chicago and Seattle: what else actually differs
Beyond the closing table, three things separate these markets for a foreign buyer. Property tax mechanics. Cook County assesses and bills on a schedule that produces a first installment set by statute at a percentage of the prior year's bill, with the second installment reflecting current rates, so a buyer's first full year can look nothing like the seller's operating statement. Washington has no state income tax, which buyers often read as a low-tax state, and the excise tax table above is the correction to that assumption.
Rent regulation. Both markets have active policy debate on tenant protections, and both change. Whatever you are told in a broker package, confirm current rules with local counsel, because the rules drive the rent roll that drives your loan.
Lender geography. Chicago has deep regional bank coverage for apartment product; Seattle's lender bench is thinner on small balance multifamily and weighted toward credit unions and portfolio shops. That is a practical reason the same sponsor can get different answers in the two cities on an identical building.
Stabilized apartment product is exactly what agency programs are built for, which is what makes the Key Principal rule expensive when it applies.
What borrowers can actually control: 4 levers
1. The guaranty question, asked first. Open every lender call with who must sign the non-recourse carve-out guaranty and whether that person needs US status. It sorts the lender list in one question instead of three weeks.
2. The entity, formed early. A US single-asset entity with a tax identification number in place before you apply removes weeks from the timeline and is required by most lenders in this category regardless.
3. Documentation quality. Translated, and where required apostilled, financial statements; a clear source-of-funds trail; a US bank relationship opened before the application rather than during it.
4. Which market you enter first. If both cities are genuinely open to you, let the lender bench decide rather than the tax table. If a bank has already declined, our guide on what to do after a bank denial maps the routes that stay open.
What this page will not tell you: three honest limits
It is not immigration, tax or legal advice. Whether a particular structure satisfies a lender's Key Principal requirement is a determination for that lender and its counsel on your facts, and the residency question belongs to an immigration attorney. This page tells you which questions to ask, not what your answer is.
It will not tell you the rate you will get. Foreign national pricing on apartment buildings varies more by sponsor and lender than by city, and every figure here is a published rate or a worked example rather than a quote.
It is written by a brokerage with no office in either city. Commercial Mortgage Connection is headquartered in Yonkers, NY, is paid when loans close, and publishes no rate sheet. If you hold a green card, a licensed agency lender is usually your cheapest first call and a broker adds little to a clean, stabilized file. A broker earns its fee when the Key Principal question, the documentation or the sponsor profile has pushed the deal off the agency list.
Does this apply in your state?
Commercial Mortgage Connection is headquartered in Yonkers, NY and places multifamily loans through its 750+ lender network in all 50 states, including Illinois and Washington. The Fannie Mae Key Principal requirement is national and applies identically in both cities and everywhere else.
What changes by state is everything around the loan. Transfer and excise taxes differ sharply, as the table above shows, and so do recording practice, entity formation requirements, rent regulation and foreclosure procedure. Confirm the specifics with counsel licensed in the state your property sits in before you sign a term sheet, and confirm the tax treatment of your ownership structure with a US tax advisor before you form the entity.
Foreign nationals buying apartment buildings: FAQ
Can a foreign national get a Fannie Mae or Freddie Mac loan on an apartment building?
With Fannie Mae, generally not as the individual Key Principal. The Fannie Mae Multifamily Guide instructs lenders to ensure that any individual Key Principal is not a Foreign Person, defined as someone who is not a US citizen, not a lawful permanent resident and not a US-organized entity.
Freddie Mac is the exception: its Small Balance Loan Guide allows an approved Foreign Borrower Principal, and a foreign guarantor who owns or manages other US real estate, appoints a US agent for service of process and holds liquidity in a US bank account. A lawful permanent resident falls outside the Fannie Mae definition and is eligible either way. The common workaround remains a US citizen or permanent resident partner who genuinely controls or manages the borrower and signs the guaranty.
Who lends to foreign nationals buying apartment buildings in Chicago or Seattle?
Banks with international divisions, non-bank portfolio lenders and debt funds all quote these deals. Banks tend to want a deposit relationship and full global financials; portfolio lenders are the core market and price the story at lower leverage; debt funds lend against the asset and a defined exit at the highest cost. The lender list is national rather than local, which is why the same sponsor can get different answers in the two cities on an identical building.
How much transfer tax does a buyer pay on an apartment building in Chicago versus Seattle?
On a $6,000,000 building, a Chicago buyer customarily pays about $45,000, because the city charges the buyer $3.75 per $500 of price, with the seller paying about $27,000 more across city, state and county. A Seattle buyer customarily pays nothing: Washington's graduated real estate excise tax falls on the seller and runs about $179,075 on the same price including a local rate. The Seattle cost is real, it just arrives inside the asking price rather than on your wire.
Does a US LLC solve the foreign national problem on an apartment loan?
It solves part of it. Most lenders in this category require a US single-asset entity as borrower, so forming one is necessary. It does not by itself satisfy the agency Key Principal requirement, which asks about the individual who controls or manages the borrower and may sign the guaranty, not only about the entity on the deed. Forming a US LLC and remaining the sole individual behind it leaves the agency question unanswered.
What documents should a foreign national have ready before applying?
A US single-asset entity with a tax identification number, translated and where required apostilled financial statements from your home country, a documented source-of-funds trail, a US bank relationship opened before the application, passport and visa documentation, and the property package any sponsor would bring: rent roll, trailing twelve months of operating statements and a schedule of real estate owned. Having these in place before the first lender call is usually worth more to your timeline than any single lender introduction.
Sources
- Fannie Mae Multifamily Guide, Small Mortgage Loans, Key Principals. Requirement that an individual Key Principal not be a Foreign Person, and the Guide definitions of Foreign Person and Key Principal. Checked 15 September 2026.
- Fannie Mae Multifamily Guide, Section 303.01, Key Principals, Principals, and Guarantors. Requirement that the Guarantor not be a foreign person or foreign entity on every Mortgage Loan. Checked 15 September 2026.
- Freddie Mac Multifamily Seller/Servicer Guide, Chapter 9SBL, Small Balance Loans. Foreign Borrower Principal and Foreign Guarantor requirements, including the US service agent and US liquidity conditions. Checked 15 September 2026.
- Washington State Department of Revenue, Real Estate Excise Tax. Graduated state REET structure, the requirement to add local REET, and the four-year threshold adjustment under RCW 82.45.060 with new brackets effective 1 January 2027. Checked 15 September 2026.
- Federal Reserve Board, July 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices. Checked 15 September 2026.
Michael McGovernFounder, Commercial Mortgage Connection. Michael wrote this guide from the structuring side: he began at Bear Stearns & Co. in 1997, structured billions of dollars in CMBS and MBS in Bear's F.A.S.T. group, is a certified commercial underwriter and a member of the National Association of Mortgage Underwriters, and has originated more than $1 billion in mortgages.
Settle the signature question first. Then shop the loan.
Tell us who would sign the guaranty and what status they hold, and a senior banker will tell you honestly whether the agency route is open to you or whether this is a portfolio file, with a response within 4 hours, in Illinois, Washington and all 50 states. Call 888-656-9812, live operator 24/7.
Facts on this page were verified against the cited Fannie Mae, Washington Department of Revenue and Federal Reserve sources on 15 September 2026. Transfer and excise tax figures are worked examples using published rates and customary allocation; contracts can reallocate who pays, local rates vary, and Washington's thresholds change on 1 January 2027, so confirm current figures with escrow and counsel.
Lender practice toward foreign sponsors varies by institution and quarter, and nothing here is any lender's policy.
Nothing on this page is a loan offer, a rate quote, a prediction, or personalized financial, tax, legal or immigration advice; whether a structure satisfies a lender's Key Principal requirement is a determination for that lender and its counsel, and all financing is subject to lender approval, credit review and property underwriting, with no approval guaranteed. Broker licensing and closing rules vary by state. Commercial Mortgage Connection is a commercial mortgage brokerage headquartered in Yonkers, NY, has no office in Chicago or Seattle, is paid when loans close, and sells the service described on this page. Equal Housing Opportunity. Call 888-656-9812 to discuss your scenario.
