Editor’s Note: This story has been updated to clarify a quote from Tamara King
To get a mortgage in the U.S., you generally need at least a 600 credit score, a 20% down payment (or the ability to pay more for mortgage insurance) and a 43% debt-to-income ratio. What you don’t necessarily need is U.S. citizenship.
Some national and local companies do offer home loans to undocumented immigrants, said Jason Madiedo, CEO of Alterra Home Loans in Las Vegas and past president of the National Association of Hispanic Real Estate Professionals. There are also programs where foreign nationals can get a mortgage.
Granted, these loans are not exactly mainstream. The Federal Housing Administration, for instance, does require lenders to verify that an applicant is a citizen or lawful permanent or nonpermanent resident in the U.S., as do Fannie Mae and Freddie Mac, the agencies that buy and back most home loans.
“You need proper documentation in order to obtain a mortgage,” said Tamara King, vice president of residential policy and member engagement at the Mortgage Bankers Association. “Lenders are going to be meticulous and mindful about making sure they have all the proper documentation from a prospective borrower. Importantly, it is possible for lawfully present resident non-citizens to obtain loans from FHA and through programs offered by Fannie Mae and Freddie Mac. But a lender looking to work with these government programs will need to verify the citizenship or legal residency of the prospective borrower.”
Beyond the SSN
To verify citizenship or residency and credit history, standard loan applications require borrowers to provide a Social Security number. But some lenders do let borrowers apply with an Individual Taxpayer Identification Number (ITIN), a nine-digit tax processing number available to certain nonresident and resident aliens, their spouses and dependents. And others may request alternate forms of ID on their mortgage applications.
“It’s not always cut and [dry],” Madiedo said in an email. “Some states allow Driver’s License issuance.”
Underwriting and income verification may also be done using alternative means, since many undocumented immigrants primarily or even exclusively use cash and, therefore, have thin or no credit files. (You can see where your credit scores stand for free on Credit.com.) For instance, some lenders may look at rent, phone or utility bills to assess an applicant’s ability to repay.
Given the more labor-intensive underwriting process, mortgages made to undocumented immigrants may carry higher interest rates than conventional loans, though other facets of the two (like down payments) may be similar.
“The Loan-to-Value requirements are 20% down with our company,” Madiedo said.
Immigrants looking for a mortgage may want to start by checking to see if they have a credit history. (You can do so by pulling your credit reports for free one a year at AnnualCreditReport.com.) Beyond that, you will need to do some research. Read the terms and conditions of any mortgage you are offered carefully. Comparison-shop and vet any company you are considering doing business with.
“Talk to your local realtors, [do an] online search,” Madiedo said. “Never pay anything upfront for advice or information.”
More on Mortgages & Homebuying:
- Why You Should Check Your Credit Before Buying a Home
- How to Find & Choose a Mortgage Lender
- How to Refinance Your Home Loan With Bad Credit