What Options do U.S. and Canadian Citizens Have When They Can’t Negotiate Owner Financing in Costa Rica?

• Private Lending and Asset-Based Financing

Private lending is often the most flexible alternative to owner financing in Costa Rica. These loans are secured directly by the property itself and do not depend on the buyer’s residency, nationality, or local credit history because the approval focuses primarily on the property’s value and legal status. Private lending has become one of the fastest ways to close a real estate transaction in Costa Rica. The process typically takes two to three weeks, depending on the time required to complete the property’s due diligence. Once the property is verified and appraised, the loan can move forward without the extensive paperwork or long approval timelines that are common with banks. Since these loans are designed for speed and flexibility, they usually carry shorter terms—between two and three years—and interest rates ranging from 10% to 12% annually. Beware as loan sharks may be out there and provide financing at crazy interests above 12%. While these terms may seem higher than traditional bank rates, the benefit lies in fast access to funds and fewer requirements. Many buyers choose private lending as a bridge solution—a way to secure their desired property quickly while arranging for longer-term financing through a bank or other institution later on. This model allows foreign investors and expats to participate in the Costa Rican real estate market without delays or residency restrictions, making it a powerful and practical financing tool. Typical features:

• Fast approvals (typically 2 – 3 weeks)
• Loan-to-Value (LTV) up to 40–50%
• Interest rates from 10–12% annually
• Legally structured via mortgage or trust
• Perfect for bridge loans or fast closings

2. U.S.-Style Mortgages for Foreign Buyers

In recent years, several international lenders and U.S.-based mortgage companies have begun offering North American–style home loans for properties in Costa Rica. What makes these loans unique is that the application and approval process closely mirror the U.S. mortgage system. In these cases, lenders evaluate the borrower’s credit score and foreign income, conduct full due diligence on the property, and register a mortgage or entrust  the real estate being purchased. This financing option is available exclusively to U.S. citizens, permanent residents, and green card holders. Interest rates typically range between 8% and 9%, with repayment terms that can extend from 15 to 30 years, offering a longer horizon than private or owner financing options. However, qualifying requires a minimum FICO credit score of 720 and a down payment of at least 25% of the purchase price. It’s also important to note that these to date loans do not cover land purchases or construction projects—they are strictly for existing residential properties. For qualified U.S. buyers, this option provides a familiar, regulated structure with predictable terms, allowing them to finance Costa Rican properties through a system that feels much like home. Typical features:

• Based on foreign income and credit score
• Terms between 15–30 years
• Fixed-rate payments in USD
• Similar underwriting to the U.S. mortgage process

3. Local Bank Loans for Expats

Another option for buyers who cannot negotiate owner financing or do not qualify for U.S Style mortagages is to obtain a mortgage directly through a Costa Rican bank. Local banks have gradually opened up to foreign buyers, especially those with verifiable income and strong financial documentation. Bank loans in Costa Rica generally offer lower interest rates than private lending, typically ranging between 7% and 9% annually, and provide longer repayment terms, often from 15 to 30 years, depending on the borrower’s profile and the type of property. To qualify, borrowers must usually demonstrate stable income, either local or foreign, supported by financial statements, tax returns, and proof of funds. The property being purchased serves as the main collateral, and the bank registers a first mortgage over it to secure repayment. While the approval process is more formal and may take longer often 60 to 90 days, it provides a structured, long-term solution with predictable payments and local oversight. For buyers planning to establish residence or keep the property for many years, bank financing can be a solid and cost-effective alternative. Expect:

• Longer processing times (up to 90 days)
• Competitive rates (lower than private lending)
• More documentation required
• Option to structure loans under a Costa Rican corporation

4. Equity or Portfolio-Based Loans

Equity or Portfolio-Based Loans are financing structures in which an investor uses their existing assets or investments, such as stocks, bonds, funds, as collateral to obtain a loan. Instead of securing the credit with the property being purchased in Costa Rica or having to disclose its credit score or profile, the loan is backed by the value of the investor’s portfolio, allowing access to liquidity without selling those assets. The funds obtained can then be used to purchase real estate in Costa Rica, often under favorable conditions, since the risk is secured by the borrower’s assets in their home country. Interest rates for this type of financing generally range between 4% and 5%, which makes them highly attractive compared to other lending alternatives available to foreign buyers. Advantages:

• Extremely fast approvals (24–48 hours)
• Keeps liquidity available for other investments

Legal and Due Diligence Considerations Before entering into any financing agreement in Costa Rica, ensure that:

• A property title review is conducted to confirm ownership, boundaries, and easements.
• A qualified attorney verifies all loan documents, collateral terms, and closing procedures.
• The transaction follows Costa Rican lending and property laws, whether through a mortgage or trust.

Legal guidance is essential to protect both the investment and the lender relationship. If you are a United States or Canadian Citizen and you can’t secure owner financing in Costa Rica, you still have plenty of options. From private lenders and United States style mortgage programs to local banks and equity-based financing, there’s a pathway for every foreign buyer. The key is working with experienced legal and financial professionals who understand both Costa Rican real estate law and expat financing strategies. Your dream home, vacation property, or investment in Costa Rica is still within reach, even without seller financing. You can complete our Quatro Legal – Financial Solutions Intake Form, which helps our team collect the key details needed to evaluate your profile and advise on the ideal financing program for you. Our legal team specializes in assisting foreign investors from the United States and Canada obtain financing through every stage of the process — from bank procedures and compliance to mortgage registration — ensuring your financing is handled efficiently and securely. If you want to explore financing options in Costa Rica, contact us at financialsolutions@quatro.legal. Quatro Legal helps United States and Canadian Citizens obtain financing in Costa Rica through all of the financing alternatives described above. 

Disclaimer: The information provided in this blog post is for general informational purposes only and is not intended to constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change. For the most accurate and up-to-date information, please contact our office directly. Some images may be AI generated.