When someone mentioned this proposal to me, I thought it was nuts. Selling the right to live in America for $500,000? But then a quick search revealed that the Senate is indeed considering such an idea as part of a larger bipartisan provision of immigration measures (VISIT-USA Act), co-authored by Senators. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah)
The program would create a new homeowner visa that would be renewable every three years. To be eligible, a person would have to buy a primary residence of at least $250,000 and spend a total of $500,000 on residential real estate (i.e. rentals or vacation homes). This proposal is similar to an existing program that puts foreign nationals on a fast track to a green card if they invest at least $500,000 in an American business that creates at least 10 jobs. The homeowner visa proposal though does not lead to a green card and has considerably more restrictions.
Here’s how the program was being justified by the Senators:
“Many people want to come and live in the United States,” said New York’s Republican Senator Charles Schumer, who introduced the legislation yesterday in the Senate along with Utah’s Republican Senator Mike Lee.”They will be here spending money and paying taxes, and the most important thing is they’ll sop up the extra supply of homes we have right now compared to demand, and that’s what’s dragging our economy down.”
“The bill does not limit people from being productive,” Schumer said. “It simply prevents them from coming here and taking jobs that otherwise would go to Americans.”
The idea has some high-profile supporters, including Warren Buffet, who this summer floated the idea of encouraging more “rich immigrants” to buy homes. “If you wanted to change your immigration policy so that you let 500,000 families in but they have to have a significant net worth and everything, you’d solve things very quickly,” Mr. Buffet told the Wall Street Journal.
Before we get too angry with the Senators for considering such a thing, the program does come with a bunch of restrictions that protect current American residents.
- The purchase would have to be in cash, with no mortgage or home equity loan are allowed. And the property would have to be bought for more than its most recent appraised value
- The buyer would have to live in the home for at least 180 days each year, which would require paying US income taxes on any foreign earnings. Buyers would no longer be eligible for the temporary visa if the property were sold.
- The buyer would be able to bring a spouse and minor children to live in the US but would need to apply for a work visa to hold a job. Neither the buyer nor dependents would be eligible to receive Medicaid, Medicare or Social Security benefits.
Your Take? I think the above idea is just a money grab and it is unlikely that many ‘rich” foreign nationals would really partake of the opportunity given the severe restrictions. In particular the prospect of being subject to US taxes without being able to work here would be a major turn-off. But this bill does show how desperate (creative?) the government is getting in trying to solve the housing crisis.
15 thoughts on “Buying an American Visa For a $500,000 Home Purchase – A Solution to the Housing crisis?”
My plan is to get ahead of the game for once!
I have more mortgage than house value.
A large number of people lost jobs and houses in 2008 and 2009.
Many had to declare bankruptcy.
A portion of these people have been back to work for at least 1 year.
They are in a good position to purchase a new home at discount prices.
They will start qualifying for new mortgages 3 yrs after bankruptcy.
That means these homes can get financed in 2012 and 2013.
I’m getting on board with FNMA while it is a sleeper.
It jumped up to $1.00 last Feb 2011, so it has potential now.
I think it is going to go far past this level – to $35 within 10 years.
By betting $200 for 1000 shares I could lose my little investment.
But, when it goes to $2 I make 10x my money, or $10,000.
It was at $70 in 2008.
When it goes to 10% of that amount or $7 that’s 35x gain.
For 1000 shares that’s $35,000.
I will use this benefit from FNMA to pay my mortgage down.
Then I will have more house value than mortgage.
That is the way life should be.
It is definitely worth risking $200.
Would China buying millions bushells of corns and tons of pork famine Americans? Would foreigners buying shares of corporate America stocks or gold coins deplete the wealth of America? Thinking buying a house a form of property being like buying cars, stocks, gold coins, travel and higher education service, such an investment or consumption of service will bring the supply-over-demand housing market to balance. The bill works nothing like granting freedom of exits to foreign buyers. Foreign buyers will have to pay taxes and buy their own health insurance.
I laugh at this. Has American descended so low in the pit of stupidity?? I feel sorry for Americans. Think about this. If a foreigner is as rich as having $500K (cash), he probably already been visiting America and so this new program would not mean anything to them. If I have $500K cash, why would I want to come and live in America?? that money in most country would put you in the upper class.
The other thing is the visa would require you to stay 183 days in a year in the US… remember while in the US, you can not work! Stupid!! Someone who has that kind of money is probably a business man or an executive and can not just sit his butt down in one over priced house in Miami or Vegas doing nothing!
Also, there are so many foreigners in the US already who schooled there and are working there on temporary visas. My self for example, I use to live in the US on an H1B visa, I owned 3 properties but during the recession I got laid off and got kicked out of the country. Does that make sense? Now I am in Canada. What do you think happened to my 3 houses? Do you think I would need a place to stay in Canada?? Go figure.
Americans need to fix their immigration system (now I am not even referring to ILLEGAL immigration). They also need to fix their LEGAL immigration system. It is counter productive.
Forget the $500K BS.
I’m not sure if you know, but the average price of a home in the UK is $400,000. That means over 80% of middle class families have homes over $500,000. There are literally hundreds of thouands of Brits who retire abroad every year, however mainly to Spain and Australia – because they can not currently legally stay in the US all year. There would be hundreds of thousands of Brits who would love to retire in the USA – who would buy a $500k home ( or a 250k home and a $250k rental property). They have no interest in working, they simply want to retire in the sun, buy a home that they couldnt have dreamt of in the UK and take advantage of the lower cost of living. So you don’t have to be rich, just have a home in the UK that you can sell and have a decent pension.
I actually emailed the Federal Reserve and Bloomberg News and some Senators telling them to do exactly this in March 2008. Over 3 years ago….. by coincidence I actually used the same the same $500k figure as Buffett. Iit’s shame millions of americans have lost their homes since as this would have helped a great deal in early 2008!
Firstly, congrats on your foresight. But I don’t think this program will amount to millions of homeowners being saved and salvation for the housing market. It is too restrictive and the fact that the foreign nationals will be subject to (higher) US taxes will be a major turn-off. Basically we are asking foreigners to bail us out, because we are broke as a nation.
Hi Andy – I agree i don’t think it will be the salvation. I think in 2008 before the world went into recession it would have helped prop up the market, especially if it brought with it a green card, but I think its too little and too late and too restrictive like you say. I think there is little option but to wait for the bottom now…..as for asking foreigners to bail us out, unfortunately its true, but it’s no different to the sovreign wealth funds buying up US banks cheap in 2009. It will be years before the economy recovers
Well, 2 more who need voted out. They most certainly have sat on their brains so long the brains are no longer functioning properly. I see nothing but complex issues (problems, if you please), from a suggestion like this being taken seriously. Like always with the D.C. crowd, it is not about the American people and the problems breaking the law introduces, it is about MONEY! Buy your way into citizenship. Hmmm, the drug cartels seems to have an abundance of money. Perhaps they could buy up the housing market, become citizens and then have a closer place from which to run their drugs. Just one thought. These senators have put a whole new twist on the word, STUPID.
Well America keep on complaining about what your politicians are doing and then go vote once again for Democrats or Republicans. When are you going to figure it out that fundamentally their is no difference between the two. Only the means to the end goal is different but the goal for both is the same, elimination of the American middle class.
Republicans want to do it by giving everything to the wealthy and Democrats want to do it by giving everything to the poor and the wealthy. Thus the Democrats are trying to achieve this goal faster than the Republicans. Neither really want smaller government. The only way to end this is for Term limits to be enacted and for free and equal air time to be given to all candidates for office so that interest groups have no more influence with their money because money would no longer be a factor.
This is just further proof our fears are no longer resting on Russia or China. Our politicians are doing the job good enough without them. Our politicians have shown clearly where there loyalty lies. Illigal alians are being given more rights over United State citicens every day. Rick Perry is a prime example. Students of the United States are paying millions of dollars on student loans while Rick Perry says lets just give illigal alians an education. Is our government going to give these illigal alians the down payment for these homes?
So many hate this but please explain how this has a negative effect on our economy that outweighs the positives of bringing money to America that will lead to creating jobs
listen im an american and i support the wall street protests 200%. it is a shame that our government can’t think of the most simplest things to bail its own hard working american citizen out but yet jump to do something for foreign people. look anyone that is at the protests on wallstreet please send my message out or copy and paste but my ideas are good enough to be taken into consideration. first of all illegal immigrants, if your not rounding them up you need to issue some type of identification card so we can get taxes from you. number two give these illegal people the minimum wage so at least there not outsourcing the normal working man/woman and will not be able to collect illegal state benfits cause now they can track what job your at and how much your getting paid. aloow these people the oppurtunity to buy their citizenship at a good price. now for the working poor anybiody making under 40 grand needs to be paid 40 grand therefore that menas no incomwe tax pay taxes on what you make… correct? now with more spending money comes more spending and more financing which is good for the economy. im a firm believer in the 2nd bill of rights that was never created because our president had passed away before getting the paper work together. and also make a better way to get a loan to buy a home because the system we have in place right now with all that credit score garbage to make safer gambles obviously didnt work seeing that or tax dollars bailed them out. add to the credit scrore system a lo9an system where if you have been paying rent for 10 years and can prove it that should be enough to show that you can pay a morgage with no problem. i pay 1000 a month in rent and in south jersey if your renting your paying alot so why not own and be able to flip your money. look i have alot of ideas and i need help getting through to who matters the most and i want the media to run my numbers and ideas to their statistics and see if this isn;t the easier solution to americas problems. of course we’re gonna have to give corparations tax cuts so they can afford to pay our people more but you know what. make them pay. it’s not fair that we are in a slump but there makin millions on our backs giving us nothing. at least let us have a home. look anybody that knows somebody please pass this passage along including whoever runs this page at msnbc. i’d appreciate it thanks.
What everyone has failed to mention is that Australia has had this exact policy for years. This is not exactly an American original. And, I could swear that Charles Schumer was a Democrat, not a Republican. That makes him smarter by 40% off the bat.
If you want to better understand how and if it works, perhaps a short study of Australia’s results would be enlightening. But, let’s see, should I swing toward it’s ridiculous and another waste of Congressional time or consider that Warren Buffet thought it was an idea to help our debt situation and our economy. I tossed a coin on that one – Warren Buffet won, Warren Buffet won! Bring on the wealthy Chinese.
Seems ridiculous and another waste of Congressional time. China already owns all our mortgages, so I guess this is just rolling out the red carpet.
I realy don’t understand, how can you guys been so stupid ? Who are causing the american financial problems ? Do you realy think that this is caused by ilegal immigrants ? Again, how can you guys been so stupid? Don’t you see that this were caused by bankers owners and big company’s that flew over seas and the governement didn’t say one word!!! OPEN YOUR EYES AMERICA, your Billionaires are your problem, not immigrants. They don’t care about theirs country, they are sending their companys to other nations and reducing their plants here.