International Tenant Screening: A Landlord's Guide

Housing is a basic human need, and regardless of where someone lives or where they’re from, they need a place to live. So, why not consider international applicants? Many landlords don’t simply because they don’t understand the tenant screening process for applicants without a Social Security number (SSN). Some wonder how the Fair Housing Act (FHA) applies.

In this guide, we’ll review how to handle and evaluate international rental applications, how international tenant screening works, the process you should take, and how best to decide on an international renter so that you stay compliant with the law and confident in your decision.

Screening Tenants Without SSNs

When considering renting to foreign nationals, it makes sense that you’d wonder exactly how to do it. A key point to note before proceeding is that the FHA applies to every individual who applies for housing in the United States, regardless of their country of origin.

It doesn’t matter if they’re a newly minted citizen of the country, on a work visa, or here to live closer to family. The same rules apply regardless of their current status. First-time violations for FHA offenders can cost over $20,000, so make sure you fully understand your rights and the rights of applicants before finding yourself writing a massive check.

When you receive a rental application from an international applicant, consider conducting a quick pre-screening before proceeding with the full application process. During this process, you can ask about SSNs or an ITIN (Individual Taxpayer Identification Number) to determine the next steps.

Most tenant screening providers require one of those numbers to process the screening. If those identifiers aren’t available, you’ll have to conduct the screening yourself, with information provided by the applicant. If you conduct pre-screenings for international applications, you should maintain the same level of consistency you use with domestic renters.

Another option is to find a service that conducts international background checks for tenants. These services are typically significantly more expensive than US-based searches, but could save you some of the manual effort.

Steps to Accept International Tenants

1. Learn about the Fair Housing Act. Under this law, landlords cannot discriminate against tenants based on race, color, national origin, religion, sex, familial status, or disability. In other words, you cannot refuse to rent to an international tenant simply because they are not a U.S. citizen. In fact, in some interpretations of this law (and in some state-level versions of Fair Housing Laws), even inquiring about an applicant’s immigration status is against the law, let alone denying an application based on it.
2. Gather the same information from all applicants, regardless of their country of origin. Gather the same information from international leads as you would from any other applicant. Get their name, address, phone number, employment history, income, and references. Remember, consistency is key.
3. Consider cultural differences. When interacting with people from diverse backgrounds, it’s essential to be aware of cultural differences. There are varying standards for what constitutes a good credit score and criminal background. Also, the Fair Housing Act protects non-English speakers against discrimination.“Having a limited ability to speak English should never be a reason to be denied a home,” said Gustavo Velasquez, assistant secretary for Fair Housing and Equal Opportunity at HUD. “Every family that calls this nation home has the same rights when it comes to renting or buying a home, regardless of where they come from or language they speak.”
4. Brush up on U.S. laws and customs. International leads will likely have questions about your rental property, the rental process, and U.S. laws and customs. You don’t have to become a lawyer. However, providing the applicant with information or resources when they need to know more will demonstrate that your property is a good use of their rent money.

Screening International Tenants: What to Consider

While it may require a little more legwork on your part, the methods for screening a tenant’s income without a SSN don’t vary too much from the standard process.

You might not be able to use a traditional screening service, but gathering the information piece by piece should still give you a proper picture of the candidate and whether they’d be a good fit for the rental.

We recommend asking for:

• A copy of their passport and visa (as applicable). These documents will verify the lead’s identity.
• A letter of reference from their previous landlord. Validate their rental history and assess their track record as a tenant by obtaining written verification from their most recent landlord.
• A letter from the lead’s employer verifying their income. Feel more confident about your prospective tenant’s ability to pay rent with this document.
• Two months of pay stubs. Pay stubs provide added assurance, and you might have a harder time obtaining them if the applicant isn’t employed in the U.S. If they are, however, this likely won’t present a problem.
• A credit reference letter. The letter should detail a financial relationship the lead had with an individual or business to demonstrate their trustworthiness and ability to make timely payments. Asset documentation or a letter of financial support would suffice in this situation.
• A monthly billing statement. Documentation, like a phone bill or utility statement, can reveal the lead’s ability to make on-time payments.

The point is, while you may have to manually piece together the complete picture of the applicant a little more than usual, there’s no real reason to prohibit international applicants. In fact, depending on the going exchange rates, you may find more qualified applicants in the international pool if you’re in a high-rent or competitive rental market.

Accepting or Denying International Applicants

As stated above, the Fair Housing Act prohibits landlords from denying an application based on an individual’s place of birth. With that said, landlords are allowed to establish specific tenant screening criteria that applicants must meet to qualify for their units. As long as landlords apply the same criteria across applicants, and those qualifications don’t violate Fair Housing laws, you’re in the clear.

Typically, tenants must meet specific income requirements, provide documentation to demonstrate their ability to make payments on time, and supply a reference. References from either a previous landlord or employer to vouch for them in some way work. If an international lead doesn’t meet one or more of your screening requirements, you can deny their application just as you would any other prospective tenant.

Then, suppose you run a credit report to evaluate a potential tenant and deny them based on an adverse report. In that case, the Fair Credit Reporting Act requires you to let them know the reason for the denial via an adverse action letter. It must also state that they have the right to request a free copy of their file by contacting the consumer reporting agency that pulled the report.

While only some states require it, it’s good practice to inform anyone you deny of your intention not to move forward with their application. It’s up to you how much detail to include in such a message (unless it’s for adverse credit reporting). Staying on the vague side in your wording will keep you clear of any potential Fair Housing violations and reduce the chances that an applicant could claim any discriminatory behavior.

The Final Word on International Screening

By opening up your rental properties to international tenants, you immediately increase the number of potential renters to fill your vacancies. While the process can be slightly trickier than for U.S. citizens, there’s no reason to lock out potential tenants just because you might have to do a bit more work.

To review, the best practice to screen international tenants is:

• Review and understand the Fair Housing Act at both the federal and state levels for your rental market.
• Pre-screen all applicants to determine if they have an SSN or ITIN.
• Decide whether to conduct the tenant screening yourself or find international screening services, keeping in mind that an international service will likely cost more than a domestic one.
• Collect the necessary documentation, including personal identification, letters of reference, income verification from the employer, pay stubs, credit reference letter, and monthly billing statements.
• Assess the information to determine if the applicant is a good fit, remembering to apply the same, consistent criteria as you would to a US-based tenant.
• Accept or deny the applicant and provide a justifiable reason for your decision.

We know that you’ve probably got this landlord business in the bag, but for more information on tenant screening practices, online rental applications, or tips on how to become an even better landlord, sign up for a free TurboTenant account and browse the blog for the latest happenings in the landlording world.

Good luck screening international tenants.

Disclaimer: This blog is for informational purposes only and is published by TurboTenant. It is not legal, financial, or tax advice. Laws and regulations for landlords vary by state and locality and may change over time. Always consult a qualified attorney, accountant, or local housing authority before making decisions related to your rental property. The publisher and authors assume no responsibility for actions taken based on the information provided.