If you are living in the United States and earning an income, but do not qualify for a Social Security number, you might think it’s impossible to get a home loan. But ITIN loans, which allow resident and non-resident aliens, as well as their dependents and spouses, to secure top-quality financing for a world-class home.
Everything You Need to Know About ITIN Loans
What are ITIN Loans?
To fully understand ITIN loans, it helps to know what an ITIN is and what it is use for. “ITIN” stands for Individual Taxpayer Identification Number, and it’s used to help people who pay taxes in the United States but do not have a Social Security number, usually because they are not complete citizens of the U.S.
ITINs are used by resident aliens who are filing taxes in the U.S. but are not eligible for a Social Security number. They are also used by non-resident aliens filing taxes, as well as dependents or spouses of U.S. citizens and resident aliens or non-resident visa holders. An ITIN helps with more than just getting a loan; it also helps protect personal assets, start a business, or create a retirement account.
An ITIN is different from an EIN, although they can be confused. An EIN is used by employers, businesses, LLCs, non-profits, and self-employed individuals for tax purposes.
Requirements for Using ITIN Loans
To use these loans, you need at least a 620 credit score. However, the program is organized in a tiered system, so you will enjoy various benefits and easier qualification if your score is higher.
620 to 659 Credit Score
If your score is between 620 and 659, you can utilize these loans and get an affordable mortgage. But you should be aware that a 25% downpayment is required, which can be a significant amount, especially for higher-priced homes. If you are purchasing a house for $500,000, you’ll need $125,000 to secure the loan.
660 to 699 Credit Score
For a borrower whose score is above 660, the downpayment requirements are eased, although they still exist. Borrowers with scores between 660 and 699 can get the loans they need using an ITIN, but a 20% downpayment is required. Using the above example, this would mean your downpayment requirement is reduced to $100,000, a reduction of $25,000. As you can see, having a strong credit score can significantly reduce the amount of upfront cash you need to bring.
If your score is 700 or above, you can enjoy a lower downpayment requirement on your ITIN loan. With this downpayment, you would have to bring $75,000 for a downpayment. From the first tier (620-659), we have reduced the downpayment requirements by $50,000.
Universal Requirement: Three Months or More of Reserves
Regardless of your credit score, you’ll need to have at least three months worth of financial reserves. So if your monthly loan payment is $2,000, you’ll need to have at least $6,000 in a readily-available account. This requirement applies even if you have a score well above 700.
Also, these loans have a minimum amount. Currently, we are only writing these loans for $250,000 or more.
You also need a clean history of payments on a variety of debts. For credit card debt, you cannot have had any late payments over the past six months. If you have late payments, it may be best to wait until after it has been six months since the last late payment.
Gift funds are allowed on these loans. Gift funds can be used to supplement downpayments and closing costs, and they may be particularly useful on these specific loans, which require larger downpayments than many other options. However, 5% of the closing costs and downpayments must come from the borrower; the rest can be gift funds that come from various friends and family. (There are restrictions on where the gift funds come from; talk to your lending agent for more information on these restrictions.)
These loans are available in a wide variety of states.* Currently, these loans are available in:
• District of Columbia
• North Carolina
• New Jersey
• South Carolina
*Note: These states are constantly changing. Some are added and some may be taken off the list, so we can’t guarantee that they are available in each state. Contact us to see if they are available in your area.
The loans must also be for either primary homes or second homes. They cannot be for investment properties. If you are interested in purchasing an investment property but do not have a Social Security number, give us a call; we may have an investment-property loan that would fit your needs.
Getting Your ITIN
If you are have not yet gotten an ITIN, the process is fairly simple. You can apply for these numbers year round through the IRS, using their W-7 form. You may need to attach other documents as requested when you send in the completed form. Once complete, you simply mail the form to the IRS, along with any other documents, then wait roughly four to six weeks before your new ITIN card arrives.
With your new ITIN, you can take out a loan, apply for refinancing, and enjoy many of the same homeownership benefits enjoyed by millions of Americans. With ITIN loans, you will also likely receive better terms and rates than you may not receive without this identification.
Enjoy the Benefits of American Homeownership with an ITIN Loan
You deserve a world-class mortgage for your purchase. Even if you don’t have a Social Security number, we can help you get the top-quality financing you deserve.