Once a filer has an ITIN, her or she may apply for a home loan through one of several lenders who offer such services.
Itâ€™s not quite as simple as applying for a loan with a Social Security number, however. Traditionally, mortgage lenders use the Social Security number to check the FICO credit score on a borrower. An ITIN borrower is not likely to have a credit report at all. Most people who are here illegally work with cash, and are unlikely to have any previous transactions that will have resulted in a credit report for them.
Without a credit report, the process of approving a loan becomes much more cumbersome, time consuming and expensive. Borrowers must provide proof of income as well as proof that they have some sort of history of regularly paying bills. Because of the time involved in handling this extra documentation, loan approval may take several times longer than with traditional mortgages. In addition, the interest rate on the loan will certainly be higher than for other mortgages in order to account for the additional risk taken on by the lender.
This product is a relatively new one and so far, only three or four national lenders are offering them. Those lenders currently include Washington Mutual, Citibank, and American Home Mortgage. Others may follow, depending on how the process seems to work for those already trying it. Those lenders will have to decide if the additional business is worth the substantial extra work involved in granting the loans, particularly since more applications will be denied with these loans than with traditional mortgages.