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Jeanine Skowronski
Jeanine Skowronski is the former Executive Editor of Credit.com. ... Read More
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Quick answer: Yes, it’s possible for undocumented immigrants to get a mortgage loan. They face legal and financial obstacles that don’t stand in the way of other purchasers, but millions have done so successfully.
You don’t need to be a resident to own real estate in the United States. Many documented immigrants own homes. While it’s difficult to get accurate statistics about undocumented homeowners for a number of reasons, in 2014, the Migration Policy Institute estimated that around 3.4 million undocumented immigrants owned homes in the United States.
Keep reading to discover how your residency status impacts the home loan process. We’ll also highlight some important information you should know about your rights when applying for a mortgage.
In This Piece
- How Residency Status Affects a Home Loan
- Understand Your Rights
- How to Get a Mortgage
How Residency Status Affects a Home Loan
Overall, residency status plays a significant role in determining the availability and terms of home loans for individuals in the United States.
Green Card Holders
Green card holders are permanent residents eligible for most types of mortgages available to U.S. citizens. This means they must provide proof of income, credit history and other financial documents to qualify for a home loan. In some cases, green card holders might face additional challenges during the home loan and purchase process. Those can include difficulty in obtaining mortgage insurance or a higher down payment requirement, which can vary based on the lender and the type of loan.
Refugees and Asylum Grantees
Refugees and asylum grantees are individuals granted legal status in the United States due to persecution or fear of persecution in their home countries. They may be eligible for certain types of mortgages. However, their ability to obtain a home loan might depend on their specific immigration status and financial circ*mstances. For example, refugees or asylum grantees who have been in the United States for less than 2 years might have a harder time getting a mortgage because many lenders require at least 2 years of residency to establish credit history.
Get matched with a personal loan that’s right for you today.
DACA
DACA recipients, or individuals who’ve been granted Deferred Action for Childhood Arrivals, are not eligible for most types of home loans. This is because they don’t have legal permanent residency status. However, some lenders may offer alternative financing options or assistance programs specifically designed for DACA recipients and other undocumented immigrants.
Additionally, DACA recipients who have obtained an Employment Authorization Document and can demonstrate a stable income and credit history may be able to get a mortgage under certain circ*mstances.
Understand Your Rights
The Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status or disability. Immigrants, including those who aren’t U.S. citizens or permanent residents, are protected under theFHA and have the same rights as other individuals.
That includes:
- The right to rent or purchase housing without discrimination based on national origin
- The right to be treated the same as U.S. citizens or permanent residents in all aspects of the housing process, including advertising, application, screening and approval
- The right to request reasonable accommodations in housing, such as modifications to the physical structure of a home or changes to policies or procedures, if disabled
If you believe you’re being discriminated against during the home loan, home buying or other housing process, you should report it.
How to Get a Mortgage as an Undocumented Immigrant
Undocumented immigrants aren’t usually able to qualify for mortgages through traditional services, such as those backed by Fannie Mae and Freddie Mac. However, individuals with an ITIN may be able to get approved for special loans from private lenders.An ITIN (Individual Taxpayer Identification Number) is a unique identifier the IRS uses to process tax returns and payments for those that do not have or do not qualify for a social security number.
Apply for an ITIN
The first step is to apply for an ITIN, or Individual Taxpayer Identification Number. You do this by completing Form W-7 via mail, in person at an IRS-authorized agent or in person at an IRS Taxpayer Assistance Center.
Save for a Down Payment
Because undocumented immigrants can’t usually qualify for federally backed loans, such as those through the FHA, they probably won’t qualify for mortgages with low down payment requirements. Private lenders may require down payments as much as 20% or even 30%. If an undocumented immigrant wants to buy a home, they should start saving as soon as possible. That might mean paying down other debt first.
Get Documentation Ready
In addition to the ITIN, undocumented immigrants will have to provide information to help qualify them for a private home loan. That information can include:
- Proof of income, such as recent pay stubs, tax returns or other financial documents
- Information about credit history, including any outstanding debts, loans or credit accounts
- Recent bank statements that show account balances and transaction history
- Identification documents, such as passports or government-issued IDs
- Proof of residency status, such as a lease agreement or utility bill in the person’s name
- Proof of employment or self-employment, such as a letter from an employer or recent tax returns
Apply for an ITIN Mortgage
Once you have anITIN, a down payment and all the necessary documentation, you can apply for an ITIN mortgage. Start by browsing the mortgage options in the Credit.com marketplace.
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Mortgages
The article delves into various aspects of credit, loans, mortgages, and related financial concepts, particularly concerning the ability of undocumented immigrants to acquire mortgage loans in the United States. Here's an overview and insights into the different topics covered:
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Credit Reports and Scores: The article implies that undocumented immigrants might not have traditional credit histories in the U.S., which makes it challenging for them to access federally backed loans. It highlights the significance of credit history, credit scores, and the challenges faced by individuals without established credit records.
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Residency Status and Loan Eligibility: The piece outlines how different types of immigration status impact eligibility for home loans. It categorizes individuals based on their residency status, such as green card holders, refugees, asylum grantees, and DACA recipients, and discusses how each group might face varying challenges in obtaining a mortgage.
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Financial Documentation for Loans: It emphasizes the importance of financial documentation for mortgage applications, including proof of income, credit history, employment status, and residency proof. This underscores the essential elements lenders typically require from applicants seeking a home loan.
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Alternative Financing for Undocumented Immigrants: The article explores alternative options for undocumented immigrants, such as ITIN (Individual Taxpayer Identification Number) mortgages, offered by private lenders. It outlines the process of applying for an ITIN and the requirements needed to qualify for such specialized loans.
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Legal Rights and Fair Housing Act: It mentions the protections provided by the Fair Housing Act, ensuring immigrants' rights in the housing process, irrespective of their citizenship or residency status. This includes protections against discrimination based on national origin.
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Mortgage Application Process: It advises undocumented immigrants to prepare thoroughly for the mortgage application process, focusing on saving for a substantial down payment, gathering required documentation, and navigating the application process specifically tailored to their situation.
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Comparative Finance Concepts: The article indirectly touches upon concepts like interest rates, down payments, creditworthiness, and the importance of savings and financial planning in the context of homeownership.
Overall, it's a comprehensive piece that discusses the complexities immigrants face in obtaining mortgages and highlights the various financial aspects involved in the process. It underscores the importance of understanding individual circ*mstances, financial readiness, and seeking alternative solutions when traditional pathways are limited due to legal status.
