The main banks in the DR are; Banco Popular, Banco del Progreso, and BHD. These, like most financial institutions in the DR, lend money to future buyers at high-interest rates (10% and above) and in their local currency. Some banks do lend US dollars but the rates are still quite high (8% and above).

So, why work with a local bank?

Firstly, their mortgage loans to purchase a vacation home are reasonably quickly available to US / Canada / English and Dominican citizens and time is a very important factor in a real estate transaction.

Secondly, despite the high-interest rates, property owners in the DR enjoy high returns on their investments 6% and above, and sometimes are able to cover the interest rates with the rental money.

To take the example. The first thing to do when looking to buy a property in the DR (with a loan) is to verify if you can actually apply for a loan. It will make things move faster if you are decided on a specific property and also help your negotiation with the seller. 

The main documents required are the following:

  • Copy of your passport plus other identification
  • Two last tax returns
  • A bank reference from your main bank

For other foreigners, loans are also available with a few additional documents required. All these documents can be sent via email.

The bank will lend you up to 70% of the value of the property if you meet their criteria (usually around 60%), or less if you wish so… Meaning that a down payment of at least 30% of the value of the property will be necessary from your side.

The value of the property taken into account is the lowest amount between either the estimated value or the agreed buying price of that property. The estimated value is the value given by an “Assessor” who will estimate the property according to a set of criteria such as lot size, built size, built year, location, number of bedrooms, materials used, etc.

By experience, this value is usually close to the selling price.

2 criteria must be met in order for you to get the loan; you must be pre-approved and the property you want to purchase must be mortgageable. Once the bank notifies you that you pre-qualify for a mortgage loan (this verification takes 1 to 2 weeks) you will be given access to an online form available in English which you must fill in.

At this point, there is a high probability that you will qualify for the loan.

Once the terms are satisfying for both parties, you’ll have to be in the Dominican Republic to sign the actual contract for the loan in person. You might be able to discuss with the bank to send someone with a power of attorney to sign in your name.