Buying a Home without a Social Security Number - ITIN Loans - Controversial, Yet Great for 11 Milllion Immigrants

I have a home builder client who aggressively markets to the Hispanic community. 

His marketing was doing very well and about six months ago, he asked us to help him get a loan product that would allow him to sell homes to people without social security cards but who had Individual Taxpayer Identification Numbers (ITIN). 

We went out and found the investor bank who would do this.  Recently, that investor announced they would allow these loans up to 100% in many cases.

ITINs were created for foreign investors and other visitors to the U.S., who owe taxes, but are not eligible to get a social security number. 

Many illegal aliens have gotten ITINs.   This allows them to file taxes legally in the U.S, even though they may not have the necessary immigration status.

This number is issued by the IRS for tax purposes only.  The ITIN holder does not have the right to live or work in the U.S. because they have the card.  However, it does give them a way to buy a house.

According to recent reports, this is potentially a $44 billion market, especially in the Hispanic community.  There are approximately 11 million immigrants who are undocumented.

This is a huge opportunity for you in today's market. 

Certainly, those who oppose illegal immigration will oppose this as well.   And there is a lot of controversy on this topic.   

However, there is no arguing that this niche provides incredible potential today.

The providers of these loans say the default rate is consistent with all other loan products and this is no riskier.

For the record, the banks that do make these loans are not suggesting that they are giving these loans to illegal aliens.  What they are saying is that these are for "undocumented" immigrants and they are not required to find out if someone is here legally or not.   Sure, it's a loophole but its one that they have been running through for some time.

For a long time banks have allowed clients to open checking and savings accounts using matricula cards (an official Mexican I.D. card) and offering money-wiring services to undocumented immigrants. 

Some of these banks have even offered car loans and other personal loans by using the matricula card.

There are some strict rules to these ITIN mortgage loans. 

These loans require that you fully disclose your income. 

The loan amount should not exceed $300,000. 

The rates will be in the mid 9.000%-11.000% range and will not be interest only but they don't require mortgage insurance.  

100% financing is sometimes available but 95% is much more common. 

For many years, before this program and even today, immigrants have bought homes where the seller carries the mortgage on a contract for deed.  

This was and is a risky deal because sellers don't always live up to their end of the agreement.

Today, there is a real option to homeownership for those without social security numbers and to those of you who successfully market to this niche.   

The bottom line is... The American dream is achievable, even if you are not yet American.

UPDATE:  I got so many private emails about this blog and if it available in your state that here is the list of prohibited places to date:  WA, NY, RI, MD, DC. Orange & Jefferson counties in Texas; Dade, Boward, Coller & Monroe in Florida.