http://www.cnbc.com/id/101826458"Owning a home isn't just for suckers... it's creating a class of fools for those who do buy, because so many Americans continue to think home ownership is the passport to the so-called American dream."

I have a german passport and live and work outside the US.

You will need a valid passport and a current US visa.

Is it crucial to have a copy of the cosigner's social security card and/or a federal issued photo ID such as a drivers license, passport, etc.?

Call the escrow office and ask what ID they will want.I've never had to show anything but a driver's license, but it is possible that the state laws might vary.If you are not a USA citizen, I suppose it is possible that you might have to show a passport.

I'm from Puerto Rico (USA Passport), he is British.

Can I finance and buy easily in another EU country, or is it easier to do so in the one I have a passport for?...

References will become tantamount to a passport equivalent for those landlords who know what they are doing. 

Here is a list of documents I tend to ask for:Completed ApplicationPhoto ID (Passport or Driver's License or State ID)Most Recent Tax ReturnMost Recent W-2/1099 (If Independent Contractor)3 Most Recent Bank Statement (Showing Maximum Liquid Assets)3 Most Recent Paystubs-Student School Schedule and ID (if applicable)Pet License (if applicable)Pet Vaccinations Records (if applicable)Landlord Reference Letter (if applicable)Proof of Rent Payments (if applicable)CPA Letter (if applicable)If they can't provide sufficient documentation for you to approve them as tenants, then it would be better for you to move on to the next applicant.

Additionally, you should always request a copy of residents state-issued government ID, driver’s license or passport and a headshot and selfie.