Where the belief comes from
It comes from a real experience. Someone walks into a retail bank, asks about a mortgage, and is told no, because the underwriting that bank runs starts with a US credit score and a Social Security number, and the applicant has neither. That is a true answer about that lender. It gets heard as a true answer about the country.
The gap is that a bank branch and a wholesale lending channel are not the same market. A product that does not exist on one desk can be routine on another.
What actually replaces a US credit file
A foreign national file substitutes documentation for the things a domestic file takes from a credit bureau. A reference letter from a home-country financial institution can evidence a repayment history. Bank statements evidence reserves and the source of the down payment. A passport and visa documentation evidence identity.
None of that is exotic. It is the same set of questions a lender always asks (who are you, where did the money come from, can you repay), answered with different paperwork.
Business purpose is the usual doorway
Most foreign national files are investment property, and that matters, because a rental can be qualified on what it earns rather than on the borrower’s personal income. That removes the part of a domestic application a foreign buyer is least able to satisfy: US tax returns and a US employment history.
It also means the file is business purpose, which is available in nearly every state rather than only where I hold a licence. A DSCR loan is the usual shape it takes, and the rent-versus-payment arithmetic is the whole of it.
What it costs to be wrong about this
Assuming cash-only shrinks the buy box to whatever is liquid today. Buyers who believe it either wait years to accumulate the full purchase price or buy one property instead of considering how a financed purchase changes what is reachable.
The honest correction is narrow: financing exists and is routine. Whether any particular file works depends on the property, the documentation and the lender’s guidelines at that moment. Send the scenario and get a straight answer rather than budgeting around a rumour. This is not a commitment to lend.