In Episode #56 of The Morales Show, I spoke with Byron Enriquez about ITIN mortgage loans, a fascinating and important financial product that more people without a social security number should know about. It was fascinating talking to Enriquez, who specializes in non-traditional loan products, about how ITIN loans can help people who don’t think they qualify for a loan onto the path toward home ownership.

What is an ITIN Mortgage Loan?

Mortgage loans in the United States require that you have a Social Security Number as a borrower. Immigrants and guest workers who have a permit to work legally in the United States are given a tax ID known as an Individual Taxpayer Identification Number (ITIN). ITIN mortgage loans, then, are specialized loan products made specifically for people with this kind of tax identification rather than the more traditional SSN.

Enriquez told me that he hoped two kinds of misconceptions might be cleared up by the spread of knowledge about these kinds of loans. First, he noted that it is a common misconception that immigrants and guest workers do not pay taxes -- in fact, they not only pay taxes, they receive refunds when they have paid too much tax during the year! Second, he hopes that more people will learn about ITIN mortgage loans because too often workers without SSNs think home ownership is out of reach, even though they have the savings to purchase a home.

How Does an ITIN Mortgage Loan Compare to a Regular Loan?

For the most part, ITIN mortgage loans work exactly the same as a regular mortgage loan. It takes 17-45 days to get one, just like a normal loan, they are available in 10-30 year packages at fixed and adjustable rates, and they require a downpayment at an interest rate affected by federal interest rates and the credit worthiness of the buyer. All the fees for underwriting, processing, and escrow are all the same, too. However, there are a few differences in degree. 

While a normal loan through the FHA can require as little as 3.5% down at a 3.5% rate, ITIN loans are a bit more expensive. ITIN loans generally require a downpayment of 10-15%+, with interest rates of 6-6.5% credit, depending on the borrower’s FICO score. And while the FHA likes to see a credit score of 580+, the absolute lowest an ITIN loan can go is 600, with 640+ being preferred. However, for individuals with no credit, loans are still possible at 25% down and 7% interest. The ideal clients, Enriquez says, are those with a 720+ FICO score looking to buy a single-family home. 

How to Get an ITIN Mortgage Loan

The first thing you need to get an ITIN loan is… an ITIN! Specifically, you need to have two years of tax returns filed under that ITIN number. Though some people may switch jobs or change their ITIN numbers or file under corporate tax numbers, that doesn’t cut it for an ITIN loan.

Second, you need to speak to a loan officer who specializes in ITIN loans. As these loans are not available through the FHA, it takes a brokerage that specializes in non-traditional loan products to get an ITIN mortgage loan. These brokerages have a bit more flexibility in who they choose to work with, and thus have close relationships with financial institutions that allows them to get these kinds of products for their clients.

Finally, you need to be honest with your loan officer. Enriquez stressed that, because it is a non-traditional product, people sometimes try to hide information from their loan officer such as a previous bankruptcy or child support they owe. This, he said, was absolutely the wrong move: the financial institution will find out about it, and after they see that you have omitted that information they will scrutinize your loan all the more, leading to its rejection or a steep price increase. For those who are honest, however, Enriquez says that it is easy to explain to lenders how these kinds of things will not present a problem for your ability to repay, and thus being honest will save you time, money, and a huge headache. 

 

If you are interested in getting an ITIN loan or another non-traditional loan product like construction financing, a bridge loan, or other products typical lenders tend to shy away from, contact Enriquez at byron@jssfinancial.net, 1-818-584-6712, or through his website https://www.jssfinancial.net. His firm is hands-on and will help you out every step of the way.