You’ve been dreaming of owning a home, but you have obstacles standing in your way, and perhaps doubt they can be overcome. Maybe you’re a Deferred Action for Childhood Arrivals (DACA) recipient, immigrant, or trying to get legal residency status in the United States. These circumstances don’t make your dream impossible to achieve. As long as you have an ITIN, you may be eligible for ITIN mortgages through private lenders.
Suppose you’re an immigrant or nonresident alien in the United States. In that case, you may not qualify for a standard mortgage from a bank as most banks require a United States Social Security Number (SSN).
Although it might seem like the only option is to return to your home country or continue to rent, another option may be using an Individual Taxpayer Identification Number (ITIN) to apply for a home loan. If you’ve filed income taxes in the United States for at least two years, you can apply for a home loan with an ITIN number. We’ll help you understand ITIN mortgages and how the ITIN home loan process works for borrowers without an SSN.
An Individual Tax Identification Number is a tax identification number issued by the Internal Revenue Service (IRS) for individuals who must have a U.S. taxpayer identification number but are not eligible to obtain a Social Security Number (SSN). You can use an ITIN to open a bank account with certain banks, file your tax returns and track your credit history in the United States.
An ITIN is available to people who work in the United States but don’t qualify for an SSN. This covers undocumented immigrants, those people in the process of becoming United States citizens, those working in the United States on a U.S. Visa, DACA recipients, and several other groups that may not qualify for a Social Security number.
We’ll note here that an ITIN does not authorize employment in the United States or provide eligibility as an employee or self-employed individual. Still, it does allow you to comply with U.S. Tax laws, will enable you to receive a tax refund if you qualify, and provides some access to American systems where an SSN is usually necessary.
You might need an ITIN for the following reasons:
You may have thought the only way you could buy a home with an ITIN in the United States was to pay cash, but there are options for financing with an ITIN. Getting a mortgage and buying a home is possible using an ITIN.
You can get a home loan with an ITIN through participating lenders. These loans are usually not government-backed, so you can expect higher interest rates and down payment requirements. To begin the application process for a loan without an SSN, you’ll need:
If you’re a W2 employee, file your taxes and hold onto your pay stubs for proof of income. If you’re a 1099 contract employee or small business owner, you should ensure you have access to bank statements to share your proof of income.
It’s essential to be open with your lender about your situation up-front, so they can work with your specific situation and give you sound advice on how to move forward. These issues will arise if you have tax liens, child support, or bankruptcy, even with ITIN. If you’re forthcoming with your lender at the start, they can help you work through these issues to achieve your goal of owning a home.
You can have a credit score with an ITIN. You can use your ITIN to apply for credit and loans and track your payment history. You can check your personal credit history and credit score with an ITIN with all three major credit reporting agencies, including Equifax®, Experian®, and Transunion®. Each website allows you to submit a request for your credit report using an ITIN.
When buying a home without an SSN, this process is the same as when anyone in the United States buys a house. Your FICO® score will be checked to understand your credit history best. A FICO® score gives a bank or lender the best understanding of your credit and decides your eligibility for a home loan and the interest rate for which you qualify.
Interest rates depend on the current market. However, ITIN mortgages usually have higher interest rates than loans backed by Freddie Mac or Fannie Mae because they are offered through private lenders and are seen as a higher-risk investment.
You’ll have to check with the lender you choose to learn your exact interest rate on a foreign national mortgage. It’s encouraging to note that if you purchase your home with a high-interest rate and later gain U.S. citizenship, you can refinance your home to qualify for a lower interest rate at that time.
Only select banks and credit unions offer ITIN loans. Many of these banks are large, national institutions or online lenders that may not give you the attention and time that is necessary to work with your unique circumstances. Each lender is different, and you should consider your options when finding a bank that offers ITIN loans with quality customer service and easy-to-understand processes.
Although finding an institution willing to work with your specific situation can be difficult, getting a home loan with an ITIN is possible. It’s important to know there are banks servicing ITIN mortgage loans to help you achieve your dream of becoming a homeowner.
First Pryority Bank of Pryor and Tulsa, Oklahoma, offers ITIN mortgages. Our knowledgeable and personable loan officers can work with ITIN holders to help you with home ownership.
Contact us to learn more about our ITIN mortgage program and experience our friendly and personal service for yourself.
First Pryority Bank, Member FDIC