Buying on the Côte d’Azur as an American: how to finance your project?

They come from New York, Miami or California, often after several summers on the Riviera. They already have a favourite table in a hilltop village and know the late afternoon light over the Esterel. The day a house truly holds them, one question arrives quickly: how to finance it?

For an American buyer, the answer sometimes needs a little more preparation. Some French banks are willing to review these files, but not all of them, and the terms vary with the borrower’s profile and the institution approached.

One particular point to know is a piece of US legislation: FATCA.

FATCA, or why some banks hesitate

The Foreign Account Tax Compliance Act, better known as FATCA, is US legislation designed to strengthen tax transparency around financial accounts held abroad by American taxpayers.

It concerns, among others, "US persons", including American citizens even when they live in Europe.

In France, under a bilateral agreement, financial institutions identify the relevant accounts and send the required information to the French tax administration. That administration then passes it on to the US authorities. The French tax administration sets out how the agreement works.

For banks, these duties mean extra checks and ongoing monitoring. Some choose to limit their exposure to this clientele. Others are willing to review files, sometimes through teams specialised in international clients or through private banks.

FATCA is nonetheless only one factor among others. Place of residence, dollar income, source of funds, the security offered and each institution’s own policy can also come into play.

A buyer with a comfortable income can therefore meet a refusal, even with a solid file. Better to know that before falling in love with a terrace.

What banks may ask for

A larger down payment. According to the broker CPIM, banks generally ask non-residents for a down payment in the region of 20 to 30 % of the property price. For some profiles or institutions it can be higher. Acquisition and guarantee costs may also need to be funded on top.

These figures are benchmarks: they vary by bank, property and buyer situation, and they are not a loan offer.

A documented file. Proof of income, tax returns, bank statements, savings, existing debts and source of funds: the bank looks at the picture as a whole. Some documents may need a translation. Anti-money-laundering checks are also part of the process.

Allowing for exchange-rate risk. When a buyer earns income in dollars and borrows in euros, some banks may count that income at less than its euro equivalent to allow for exchange-rate swings. This practice varies by institution and by file. Savings already available in euros can also make it easier to prepare the project and limit exposure to exchange-rate moves on amounts already converted.

An account in France. The lending bank may ask for a French account to be opened for the loan to run through. It is useful to check this at the first conversation, because opening the account can require paperwork and take time.

A capped term and debt-to-income ratio. For home loans subject to French rules, the term is in principle limited to 25 years and the debt-to-income ratio to 35 % of income, including insurance. Certain exceptions and flexibility margins exist, as set out by the Haut Conseil de stabilité financière.

Routes worth exploring

A private bank or a specialist team. Some private banks and some services dedicated to international clients can review American files. The relationship envisaged may go beyond the mortgage alone and take account of the buyer’s overall wealth.

A broker used to non-residents. A specialist broker can help identify lenders likely to review the project, prepare the papers and present the file. Their support also clarifies possible terms before you commit to a purchase.

Buying without a French loan. Depending on their situation, a buyer may choose to pay cash or to draw on other assets or sources of finance. That decision should be weighed against their wealth goals and tax position on both sides of the Atlantic.

The right order of steps

Financing is ideally prepared before the search, rather than after the coup de cœur.

First, measure your capacity. An early conversation with a bank or a broker helps estimate the fundable budget, the down payment needed and the terms that might apply. That first assessment does not guarantee a loan, but it helps steer the search.

Next, prepare the documents and the account. Income, assets, source of funds: gathering the evidence early makes the review easier. If the bank asks for a French account, it is also better to start those steps soon enough.

Then, secure the preliminary contract. For a residential purchase financed by a home loan, the promise or compromis includes a condition precedent on obtaining the loan. It protects the buyer if financing is not obtained on the terms set out.

The amount, term, loan characteristics and deadline all deserve careful attention. According to Service-Public, that deadline cannot be shorter than one month and is usually 45 to 60 days. The buyer must also pursue the application in line with the preliminary contract. For an international file, it is wise to discuss the timeline from the outset with the notaire and the broker.

Finally, anticipate currency. Converting dollars into euros and transferring the funds have a cost and can take time. The exchange rate can move between the start of the project and signing: that point deserves preparation too.

The time difference, the other challenge

For a buyer living six or nine hours behind, the difficulty is not only about banks. It is also coordination: the bank, the notaire, the surveys, the viewings and the signatures.

Each step is simpler when you can rely on available contacts who know the local market and speak both languages.

At Azure & Stone, we can introduce you to brokers, banks and bilingual notaires used to international client files. We also coordinate your search and viewings, remotely if needed, all the way to signing.

Our guide to buying on the Côte d’Azur from abroad covers the other steps of your project.

This article is for information and does not replace personal advice. Financing terms and tax consequences depend on each buyer’s situation.

The villa is chosen with the heart. The financing is prepared with method. It is often that preparation which lets you move forward with confidence when the right house appears.

A house on the Riviera does not always wait. A well-prepared file helps you be ready at the right moment.