Residents without social security numbers may buy homes

An ITIN is not new. The initials ITIN stand for Individual Taxpayer Identification Number, a form of identification which has been available from the IRS for years as a way of identifying persons? regardless of immigration status. (See sidebar below for details.)

The ITIN is an identifier which can be used by individuals who have not been able to obtain legal residency papers at this time. Many have come to the United States as children and have been raised their entire life here in this country. Others have entered the country legally, but due to changes in immigration law, have perhaps lost their legal status and are working diligently to obtain the new requirements or fees to legalize their status.

There are others that have been here for years working hard and want to raise their children who are American citizens in homes instead of apartments. Lenders understand the situation and are willing to lend to these persons.

The National Association of Hispanic Real Estate Professionals (NAHREP) has written several articles supporting the ITIN programs in their monthly publication.

ITIN programs in Ohio
There are only two types of programs in Ohio which allow someone without an SSN to apply for a mortgage so you don't have a lot of choices or chances. For this reason, it is important that you work with a professional that knows how to close these transactions.

1. The first source of ITIN loans are underwritten and backed by the Mortgage Guaranty Insurance Corporation (MGIC). Details of interest include:

• 3% down payment;
• 3-4 alternative credit letters with at least 12 months perfect pay history; and
• Verification of rent from a management company
• full income documentation
• borrowers must be in the same line of work for the past two years.
• The rates are typically in the mid eight percentages and have mortgage insurance that is normally between 30% - 40% factors. Rates can be fixed for thirty years or fixed for five years.

Many of the companies that write these loans will not use grant programs here in Columbus for assistance in down payment and closing cost. They also can not allow collections on this ITIN program.

2. The second source of ITIN loan program has a private lender that holds the loan paper. Details of interest include:

• 5% down payment, but can use the 3% from Ohio Housing Trust Fund, currently being administered by 
  Homes on the Hill toward down payment if the clients are at 65% median income;
• Offers two options for income documentation ? full income documentation as well as stated for individuals that have filed schedule C on their taxes for the past two years; and
• borrowers must be in the same line of work for two years.
• interest rates start in the high eight percentages but no mortgage insurance. Rates can be fixed for thirty years or fixed for seven years.
• If the borrower does not have a credit score, then it is acceptable to have two alternative credit letters that have been paid on time for the past twelve months. Or, if they only have one alternative credit letter, then it is acceptable to use six months bank statements showing no NSF or overdraft activity.
• This program can allow for personal verification of rent or renting from family.

This type of program has an excellent performance rate (less than 1% of the loan paper has defaulted since the programs inception).

Individual Taxpayer Identification Number (ITIN)

As of July 1, 1996, the IRS began issuing the ITIN to individuals required to file income tax returns, but who are not eligible for a SSN. It is a nine-digit number similar to the SSN. If someone is eligible for a valid SSN, however, they are not eligible to apply for an ITIN.