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- ITIN loans allow non-citizens who don't have a Social Security number to apply for a mortgage in the US.
- Instead of using a Social Security number, borrowers of these loans provide their taxpayer ID numbers.
- To qualify, you'll typically need a high credit score and a down payment of at least 20%.
In most cases, when you get a mortgage, you'll need to give a lender your Social Security number so it can pull your credit and ensure that you meet its minimum credit score requirements.
But what if you want to buy a house but don't have a Social Security number? For non-US citizens who live and work here but aren't eligible for a Social Security number, some mortgage lenders offer a specialized type of mortgage called an ITIN loan.
ITIN loan definition
ITIN loans are mortgages for borrowers who want to buy a home in the US but don't have a Social Security number. Individuals who could benefit from these loans include both residents and non-residents who aren't citizens of the US, and the spouses of these individuals.
"ITIN loans are primarily geared towards non-US citizens and foreign nationals who do not have a Social Security number," says Carolina Gerdts, executive vice president at RelatedISG Realty. "This can include individuals living and working in the country without proper documentation and those in the process of obtaining legal status."
ITIN stands for "individual taxpayer identification number." These numbers are given to individuals who aren't eligible for a Social Security number but pay taxes in the US.
How do ITIN loans work?
ITIN mortgages work similarly to other types of mortgages, according to Shaun Martin, owner and CEO of We Buy Houses In Denver.
"These types of loans work just like any other loan, with the borrower applying online or in person and providing basic information such as income, expenses, etcetera," Martin says.
However, because they don't meet the same documentation standards that conforming mortgages do, these loans are considered non-qualified mortgages, or non-QM. Qualified mortgages have certain features that make them safer for borrowers, while non-QM loans do not.
Because of this, non-QM loans are riskier for lenders, which means they're often more expensive for borrowers. But they may be more affordable compared to things like owner financing or other non-traditional mortgage options available to these types of borrowers.
"ITIN loans usually come with higher interest rates than conforming mortgages, however, they may be more affordable overall depending on the borrower's individual situation," Martin says. "Additionally, some lenders may offer special discounts and incentives that can help reduce costs."
Incentives offered by mortgage lenders could include things like a temporary rate buydown or a lender credit that reduces your out-of-pocket costs at closing.
How to qualify for an ITIN loan
When you apply for an ITIN loan, you'll need to show that you have sufficient income and assets to afford your mortgage payments. Be ready for your lender to ask for a lot of documentation so it can get a full view of what your finances look like. This will likely include tax returns, proof of assets (such as bank statements), and any other documents that show how much money you have for the purchase. Your lender will also verify that you've been consistently employed for at least the past two years.
You'll also likely need a credit score in the high 600s, though some lenders may be willing to work with borrowers who don't have a credit score or those who have a lower score. Lenders also commonly want borrowers to have a down payment of at least 20%, and some may require even more.
Where to get an ITIN loan
Not all mortgage lenders offer ITIN loans. A couple lenders we like that do have ITIN loans are Guild Mortgage and Angel Oak Mortgage Solutions. To get an ITIN loan with Guild, you'll need a credit score of at least 660 and a down payment of 20%. Angel Oak also requires a credit score of 660, but you'll need a 25% down payment to qualify.
Lenders don't always advertise their non-QM loan options online, so it could be worth reaching out to a few lenders you like to see if they'd be willing to work with you.