YEN LOANS decides eligibility by the passport you hold, so a US passport holder with SOFA status meets the nationality test wherever they are posted. No Japanese visa, residency status or bank account is required. The property is the harder test: only reinforced concrete apartments completed in 1990 or later in listed cities qualify, which rules out houses, land, Okinawa and several base towns.
In short
- Eligibility is by passport. A US passport meets the nationality test wherever you are posted.
- We finance apartments only: reinforced concrete, completed in 1990 or later. No detached houses or land.
- We lend in five metropolitan areas. Okinawa, Iwakuni, Sasebo and Misawa are outside them. Yokosuka, Zama, Ayase and Fussa are not on the current city list.
- Near those bases, we do lend in Zushi (near Yokosuka), Sagamihara's Minami and Chuo Wards (near Camp Zama), Yamato (near Atsugi), and Akishima, Tachikawa and Hachioji (near Yokota). The 10-minute station rule applies in each.
- Loans run from ¥15M to ¥525M. The loan-to-value ratio (LTV) is up to 65% of an independent valuation, or 50% for second homes, short-term rentals and loans over ¥250M.
- If you sell during the loan term, the loan must be repaid in full at completion. Above 10% of the balance in each twelve-month period of the loan, a prepayment penalty applies in the first three years only, with none from month 37.
Can SOFA personnel borrow from YEN LOANS?
Yes, you can apply if you hold a passport from an eligible country and the property qualifies.
YEN LOANS lends to nationals of its eligible countries and regions, evidenced by the passport you hold. The United States is on that list. Where you live does not change this. If you hold a different passport, check it against the full list on our Eligibility page.
SOFA status is a different legal footing from the visa most foreign residents in Japan hold. YEN LOANS does not require a Japanese visa, residency status or a Japanese bank account. Many Japanese lenders build their mortgage checks around Japanese residency and Japanese tax documents. A SOFA posting does not usually fit that model.
The other tests are the same as for any borrower, and our guide on whether foreigners can get a mortgage in Japan sets them out. Our guide for US citizens buying in Japan covers the wider picture for American buyers.
Where can you buy near US facilities?
We lend in five metropolitan areas: Greater Tokyo, Kansai, Aichi (Nagoya), Fukuoka and Hokkaido (Sapporo). Within them, the property must be in one of the cities on our list.
Several cities on our Greater Tokyo list are within reach of US facilities in Kanagawa and western Tokyo. Some base towns are not on the current list, so an apartment there does not qualify today.
On our list near US facilities
Yamato
Kanagawa
Sagamihara
Kanagawa, Minami and Chuo Wards only
Zushi
Kanagawa
Akishima, Tachikawa, Hachioji
Western Tokyo
All are outside central Tokyo, so the 10-minute station rule below applies.
Not covered today
Yokosuka, Zama, Ayase
Kanagawa, not on the current city list
Fussa
Western Tokyo, not on the current city list
Okinawa
Outside the five areas
Iwakuni, Sasebo, Misawa
Yamaguchi, Nagasaki and Aomori, outside the five areas
Register your interest and tell us where.
The 10-minute station rule
Outside central Tokyo (the 23 Wards, Musashino, Mitaka and Chofu), the apartment must be within a 10-minute walk of the nearest railway station. All six listed cities above are outside central Tokyo, so the rule applies in each of them. Japanese listings show the walking time, so check it before you view.
Key point. Whether the property qualifies depends on where it is, and your posting does not change it. For example, a US passport holder based in Okinawa could apply to finance a qualifying apartment in Tokyo. If the apartment will not be your home, a property manager is required. The maximum LTV is 50% if it is a second home or a short-term rental.
What property can YEN LOANS finance?
YEN LOANS lends against one kind of property: a strata-titled residential apartment (condo) of reinforced concrete (RC) or steel-reinforced concrete (SRC) construction, completed in 1990 or later. Detached houses, land and finance to build a home are excluded, with the other types listed under what we do not finance today.
A newly built apartment can qualify, as long as it meets the tests above. Our guide to which properties qualify goes through each test in detail.
Check your own rules before you buy
Before you commit to a purchase, find out whether any requirements apply to you through your command, your employer or your SOFA status. YEN LOANS does not advise on these rules.
They may touch on buying property, borrowing, living off base or renting out a home. The position may differ between service members, civilian employees and contractors. Confirm what applies to you with the relevant office. Do it before you sign a purchase contract or pay a contract deposit (手付金, tetsukekin).
How is your income assessed?
We assess the income you can document, including income earned abroad and in foreign currency.
What you provide
- Income evidence: tax returns or equivalent
- Recent bank statements from your accounts
- A credit report from your country of residence, dated within the past three months
- Your passport, identification and proof of address
What you do not need
- Japanese income or Japanese tax returns
- A Japanese visa or residency status
- A Japanese bank account
Documents are accepted in English, so US paperwork does not need translating. Military retirement pay and US Social Security count as income. Affordability is assessed against your verified net income after tax and existing debt commitments, such as a mortgage or car finance at home, and YEN LOANS can also take into account assets you hold. If you are unsure what counts as equivalent evidence for you, ask us at the inquiry stage. The process starts with a short intake form and a preliminary indication, typically within 24 to 48 hours.
Payments are in yen
The loan is a Yen mortgage. Your monthly payment and the balance are both in yen, and neither changes with the exchange rate. If you are paid in US dollars, each payment costs more in dollars if the dollar weakens against the yen, and less if it strengthens. YEN LOANS does not provide currency hedging or advice on it, so plan how you will fund the payments over the life of the loan.
You do not need a Japanese bank account. Without one, a local property manager (管理会社, kanri-gaisha) collects the payment each month from a management account that you keep funded.
Borrowing with a Japanese spouse
Japan is also on the eligible list, so a Japanese national meets the nationality test on their passport in the same way. If you are thinking of borrowing together, talk to us before you apply.
What happens when you PCS?
When your permanent change of station (PCS) comes, you can keep the apartment and rent it out, or sell it and repay the loan in full. Plan for both before you buy.
Keeping it and renting it out
If you keep the apartment, rent received in Japan is in yen, so it can meet the yen payment directly, with no currency conversion. Once the apartment is not your residence, a property manager approved in advance is required. The manager can collect the rent and pay the loan from the same account. Tell us before you let the apartment. Our guide to buying a Japanese apartment to let covers lease types and managing it from abroad.
Rental income from Japanese property is subject to Japanese income tax, even while you hold SOFA status. The Status of Forces Agreement exempts the pay you receive from US forces service, but not income from Japanese sources such as rent, and time in Japan solely because of SOFA status does not count as residence for Japanese tax. So SOFA status holders are generally taxed on rent under the rules for non-residents: 20.42% of the rent is generally withheld at source by the tenant or agent who pays it to you, and you file a Japanese tax return to settle the final tax. The same applies after you PCS. Your position can differ if you are in Japan for another reason as well, or claim Japanese residence for US tax purposes. You may also have US reporting or tax obligations on the rent and on any later sale. This is general information, not tax advice. Speak to a qualified adviser who knows both systems.
Selling and repaying the loan
If you sell during the loan term, the sale must repay the loan in full at the same time. At completion, the outstanding balance is repaid from the sale proceeds, and our first-priority mortgage is discharged. If the sale price is less than the outstanding loan, you must make up the shortfall yourself at completion before the mortgage can be released.
If you sell while you are treated as a non-resident for Japanese tax, the buyer may have to withhold 10.21% of the sale price and pay it to the tax office, unless the buyer is an individual buying it as their own or a relative's home for ¥100M or less. Our guide to closing on a property in Japan explains the rule.
A sale repays the loan in full, so the early-repayment terms on our Fees page apply: up to 10% of the balance in each twelve-month period of the loan without penalty, and a penalty on the amount above that in the first three years only.
Worked example · illustrative, not a quote
No penalty from month 37
On a sale with a ¥40M balance and no other prepayment in that twelve-month period of the loan, ¥36M is above the 10% threshold. The penalty is ¥1.08M in year one, and it falls each year until it ends at month 37.
| When you sell | Penalty rate | Illustrative penalty |
|---|---|---|
| Year one (months 1–12) | 3% | ¥1.08M |
| Year two (months 13–24) | 2% | ¥720,000 |
| Year three (months 25–36) | 1% | ¥360,000 |
| Month 37 onwards | None | ¥0 |
If your tour may end within three years, build this cost into your plans.
Outside our criteria today
What if your property does not qualify today?
Stated plainly, so you do not pay fees at application for a case that cannot proceed. We do not currently finance:
Property
- Detached houses, including near a base, and whole-building purchases
- Wooden or steel-frame buildings, whatever their age, and buildings completed before 1990
- Hotel-condominiums, akiya and other vacant or unmanaged stock
- Land on its own, or finance to build a home
- Agricultural land, leasehold land (借地権, shakuchiken) and re-building prohibited land (再建築不可, saikenchiku fuka)
Station
- Apartments outside central Tokyo that are more than a 10-minute walk from a station
Location
- Property in Okinawa, or anywhere else outside our five metropolitan areas
- Base towns that are not on our city list, including Yokosuka, Zama, Ayase and Fussa
If what you want is on this list, we still want to hear from you. Register your interest and tell us the property type and the town or area, including the base you are near. We log every request and come back to you if it fits, now or later.
Reference
The loan and eligibility at a glance
These are the published terms and tests for the YEN LOANS All Japan Tracker, as they apply to a US passport holder with SOFA status.
| Item | For a US passport holder with SOFA status |
|---|---|
| Who can borrow | Nationals of eligible countries and regions, including the United States, wherever they are posted |
| Not required | A Japanese visa, residency status, Japanese bank account or Japanese income |
| Borrower age | Aged 20 or over at application and 80 or under at loan maturity |
| Property | A strata-titled residential apartment, RC or SRC, completed in 1990 or later. No detached houses, land or finance to build |
| Location | Listed cities in Greater Tokyo, Kansai, Aichi (Nagoya), Fukuoka and Hokkaido (Sapporo). Outside central Tokyo, within a 10-minute walk of a station |
| Loan size | ¥15M to ¥525M |
| Maximum loan-to-value ratio (LTV) | 65% of an independent valuation, with the purchase price as a ceiling. 50% for second homes, short-term rentals and loans over ¥250M |
| Term | Up to 35 years, capped by age 80 at maturity and by 50 years from the building's construction |
| Interest rate | 1-month TIBOR + 3.50%, reset monthly. +0.50% p.a. on loans above ¥150M, and +1.00% p.a. during an optional interest-only period of up to 5 years |
| Repayment | Monthly, in yen. A property manager approved in advance is required if the apartment is not your home or you have no Japanese bank account |
| Selling during the term | A sale must repay the whole outstanding loan at completion. Up to 10% of the balance in each twelve-month period of the loan can be prepaid without penalty. Above that, 3%, 2% and 1% in years one to three; none from month 37 |
| Documents | Income evidence (tax returns or equivalent), recent bank statements, a credit report from your country of residence dated within the past three months, your passport, identification and proof of address, accepted in English |
| Recourse | Full recourse to the borrower |
The full criteria are on the Eligibility page and the full terms on the Loan terms page.
Frequently asked questions
Can I use a VA loan to buy property in Japan?
No. A VA home loan is for a home in the United States, so it cannot be used to buy an apartment in Japan. Confirm any question about your VA benefits with the VA. YEN LOANS is a Japanese lender: its Yen mortgage finances qualifying apartments in five metropolitan areas, with no Japanese visa, residency status or bank account required.
Does YEN LOANS lend in Okinawa?
Not today. YEN LOANS currently lends in five metropolitan areas: Greater Tokyo, Kansai, Aichi (Nagoya), Fukuoka and Hokkaido (Sapporo). Okinawa is outside them, as are Iwakuni, Sasebo and Misawa. A US passport holder posted in Okinawa could still apply to finance a qualifying apartment in one of the five areas. If you want to buy in Okinawa, register your interest and tell us where.
Can I buy a house near a base with a YEN LOANS mortgage?
No. YEN LOANS lends on apartments only. Detached houses, land and finance to build a home are excluded today in every location; our guide to which properties qualify explains each rule. If you are looking at a house, please register your interest and tell us the town and roughly what you want to spend. We log every request and come back to you if it fits, now or later.
Do civilian employees and contractors qualify?
Yes, on the same basis. YEN LOANS decides eligibility by the passport you hold, not by your SOFA category, so service members, civilian employees and contractors with an eligible passport, such as a US passport, can all apply if the property qualifies. Your own rules may differ by category, so confirm what applies to you with the relevant office before you buy.
Do I pay Japanese tax on rent while I have SOFA status?
Yes. The Status of Forces Agreement exempts the pay you receive from US forces service, but not income from Japanese sources such as rent. Because time in Japan solely because of SOFA status does not count as residence for Japanese tax, SOFA status holders are generally taxed on rent as non-residents: 20.42% of the rent is generally withheld at source by the tenant or agent who pays it, and you file a Japanese tax return to settle the final tax. Your position can differ if you are in Japan for another reason as well, so ask a qualified tax adviser.
Japanese terms in this guide
- 日米地位協定Nichibei chii kyōtei
- The Status of Forces Agreement (SOFA) between Japan and the United States. It sets the legal status in Japan of US forces, their civilian component and their dependents.
- 区分所有kubun shoyū
- Strata ownership: owning one unit in a building, together with a share of the common parts. It is the form of ownership YEN LOANS lends against.
- 駅徒歩10分eki toho juppun
- "A 10-minute walk to a station", as shown in Japanese property listings. Outside central Tokyo, YEN LOANS requires the apartment to be within a 10-minute walk of the nearest railway station.
- 抵当権teitōken
- A mortgage registered over a property. YEN LOANS holds a first-priority mortgage, which is discharged once the loan is repaid in full.
Written by Kyle Steele · Reviewed by Mark T. Drabkin, Representative Director & CEO · Last reviewed .
YEN LOANS K.K. is a money lender registered with the Tokyo Metropolitan Government under the Money Lending Business Act (MLBA), license Governor of Tokyo (1) No. 31998. This article is general information, not financial advice, and is not an offer of finance. Worked examples are illustrative. Rates are indicative, reset monthly, and subject to credit assessment and security review. Effective annual rate (実質年率) within 14.6%, calculated on the principal net of fees; late-payment charge up to 20.0% p.a. All loans are full recourse to the borrower. Applications are subject to careful review and may be declined. Please check the terms of your agreement and borrow within your means. 慎重な審査の結果、お申込みの意に沿えない場合がございます。ご契約内容をご確認のうえ、ご利用は計画的に。 Full product terms are set out under Loan terms, all costs under Fees, and the approved Japanese disclosure under 貸付条件の表示.