History of Property Ownership in Mexico
1917 The Constitution of 1917 proclaimed that all land in Mexico would either
be ejido (communal) or owned by Mexican nationals only. Ejido land was given to
every village in Mexico and could not be sold. 1973 A constitutional amendment known as the Foreign Investment Law allowed foreigners to purchase real estate anywhere in Mexico, except the restricted zone. The restricted zone consists of areas within 100 km (64 miles) of international borders or within 50 km (32 miles) from the coastline (at high tide).
1993 Mexico amends the constitution to allow foreigners to purchase real estate within the restricted zone by means of a fideicomiso (bank trust).
1994 The NAFTA trade agreement between the United States, Canada, and Mexico is passed. A constitutional amendment allows corporations to be 100% foreign-owned. (A corporation may own property in a restricted zone without a fideicomiso.)
From about 2005 to 20010 It was possible for foreigners to obtain financing for purchasing real estate in Mexico, but the process was very difficult. Mexican banks will NOT finance your purchase, so you will need to consult a bank in your home country. There also companies which advertise on the Internet that provide financing for U.S. citizens, but these companies mainly deal with second mortgages, and we do not work with any at the present time.
Commercial and Construction Loans: Contact us. Sources are few and minimum loan requirements high
Financing Your Mexican Property Investment
Historically and in many cases today, most property/real-estate deals in Mexico are cash only. Mexican Banks are now beginning to offer mortgage products for the purchase of real-estate in Mexico, although 30-40% deposits are required and interest rates are not as attractive as those in the US, Canada and Europe.
There are presently no banks in the US who are now offering mortgages on Mexican Property, but they are usually offered on the back of equity built up in a property in the USA and the rates are higher on the additional loan amount, to reflect the additional risk. Many Americans HAVE mortgaged a house in Mexico using this financial vehicle so it is possible.
Financing inside Mexico is still difficult and relatively expensive if loan sources are available, so if you plan to buy real-estate in Mexico you will be well advised to have your own foreign funding available; either through an equity-release scheme or other fund.
Some people who are planning to retire to Mexico will sell their house in their home country and use the proceeds to finance property in Mexico; those who want to keep a 'base back home' may release equity from their existing home, rent it out, and use the dual proceeds to fund their retirement home in Mexico.
It's important to think carefully beforehand about how you are going to finance your property in Mexico. An Estate Agent in Mexico may be able to advise you, and some even have connections with financial institutions in the USA who can proffer solutions depending on your personal circumstances.