A clear understanding of credit, income, and loan options is essential for Nepalis in the United States seeking to buy a home, according to mortgage professional Yam Adhikari, who has been working in residential and commercial lending.
In an interview with Khasokhas, Adhikari outlined key financial preparations, common mistakes, and loan programs that can help first-time buyers and investors navigate the U.S. housing market.
Credit score and loan access
Adhikari said credit score plays a critical role in qualifying for a mortgage. Generally, a score of around 650 or below may make it difficult to secure a loan, particularly for conventional mortgages. However, government-backed programs such as FHA (Federal Housing Administration) and VA (Veterans Affairs) loans may allow lower credit scores under certain conditions.
He emphasized that improving credit habits is crucial. Keeping credit card usage below 30 percent of the limit and making timely payments can gradually raise scores, while unpaid debts or collections can significantly lower them. A higher credit score also increases the chances of securing lower interest rates.
Debt-to-income ratio matters
Another key factor is the debt-to-income (DTI) ratio, which measures how much debt a borrower carries relative to income. For conventional loans, lenders typically prefer a DTI below 50 percent. FHA loans may allow higher ratios—sometimes up to about 57 percent—depending on the borrower’s overall financial profile.
“Borrowers should not just focus on approval but also on their ability to comfortably manage monthly payments,” Adhikari said, noting that individual consultation is often necessary to assess income stability and financial capacity.
Down payment misconceptions
Adhikari addressed a common misconception that a 20 percent down payment is mandatory. In reality, some programs allow buyers to purchase homes with as little as 3 percent down, or 3.5 percent under FHA loans. Certain professionals, such as doctors, may even qualify for zero down payment options.
However, putting down less than 20 percent usually requires private mortgage insurance (PMI), adding to monthly costs. A 20 percent down payment eliminates this expense.
Options for self-employed buyers
For self-employed individuals or those working on 1099 income, traditional tax returns may not fully reflect earnings. In such cases, “bank statement loans” based on 12 months of deposits can be used. Alternatively, profit-and-loss statements verified by a certified public accountant (CPA) may help demonstrate income and qualify for financing.
Investment-focused DSCR loans
Adhikari also highlighted DSCR (Debt Service Coverage Ratio) loans, which are popular among real estate investors. These loans are approved based on the rental income potential of a property rather than the borrower’s personal income.
If expected rent can cover mortgage payments—including principal, interest, taxes, and insurance—the loan may be approved. This makes DSCR loans an attractive option for Nepali investors looking to build income-generating property portfolios.
SBA loans for business buyers
For those interested in purchasing businesses such as gas stations or grocery stores, Small Business Administration (SBA) loans can be a viable option. With a solid business plan and 10 to 15 percent down payment, buyers may acquire existing businesses with proven cash flow.
Adhikari noted that industry experience can strengthen applications and improve the likelihood of approval.
Guidance for new immigrants
New immigrants who have been in the U.S. for one to two years can also achieve homeownership with proper planning. Adhikari advised maintaining a strong credit profile, stable employment, and consistent financial records.
Avoiding late payments and staying compliant with laws are also critical. “With disciplined financial management, even recent arrivals can become homeowners within a short period,” he said.
Refinancing opportunities
In a high interest rate environment, Adhikari said buyers should prioritize their housing needs first. If rates decline in the future, refinancing can reduce monthly payments or eliminate mortgage insurance once sufficient equity—typically 20 percent—is reached.
Refinancing can also help shorten loan terms or remove co-signers from an existing mortgage.
Common mistakes to avoid
Adhikari identified common pitfalls among Nepali borrowers, including overstating financial capacity and taking on higher monthly payments than they can sustain. He stressed the importance of transparency with lenders and making decisions based on realistic affordability.
Loan programs and condo rules
FHA loans are particularly beneficial for first-time homebuyers due to low down payment requirements and flexible credit criteria. VA loans offer zero down payment options for eligible veterans.
For condominiums, buyers must meet additional documentation requirements related to the condo association, though the process is generally manageable.
Adhikari said his services currently cover several states, including Texas, New Jersey, Pennsylvania, and New Hampshire, with broader availability for certain business and housing loan programs.
He encouraged prospective buyers to seek professional guidance to better understand their financial position and available options before entering the housing market.
Kishor Panthi
View More PostsKishor Panthi is the founder and editor-in-chief of Khasokhas and NepYork. He is the author of three books, “Kampan,” "UNTRANSLATABLE" and “Zero Mile.” He writes about social issues, immigration, and politics.
