Many Illegal Immigrants Becoming Homeowners With Legal Mortgages

“After a while you realize that you’re here for a long time, and you don’t want to throw your money away by renting,” said Marquez, who also owns a home in his hometown in Mexico, San Jose Iturbide. “It’s a way to set roots and invest in the future.”

Texas is attractive for immigrants such as Marquez because homes are affordable here — even if you’re an illegal immigrant with working-class wages.

“New rules and affordable home prices in Texas are leading to an increased number of illegal immigrants buying homes in North Texas,” said Marty Martinez, a North Texas real estate agent and board member of the Washington-based National Association of Hispanic Real Estate Professionals, or NAHREP. “Texas real estate prices provide a big incentive. First-time homebuyers can generally buy a home for under $100,000.”

While it’s illegal to hire undocumented workers, there’s nothing wrong with lending them money. In fact, federal and state governments are subtly encouraging banks to issue home mortgages to illegal immigrants through little-known individual tax numbers. Banks are also training employees to speak Spanish and guide customers into homeownership.

Foreigners who are not eligible for Social Security cards can apply to the IRS for an individual tax identification number, known as ITINs, which enable them to pay taxes. About 8 million ITINs have been issued since 1997, and an ITIN can be an illegal immigrant’s ticket to a home mortgage.

Immigration and mortgage specialists say it’s difficult to get firm figures on the number of homes purchased using ITINs. This is partially due to privacy concerns. Other illegal immigrants, including Marquez, instead will purchase a home through a relative or trusted friend who is in the U.S. legally.

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In 2004, NAHREP published a study that estimated that more than 200,000 illegal immigrants from Latin America qualify to buy homes. They represent a housing mortgage market of about $44 billion and growing, said Frances Martinez Myers, NAHREP president. Troutman calls that figure conservative, saying the actual numbers are multiples of that.

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As the U.S. housing market slows down, Troutman says, real estate companies and banks are looking at the nontraditional homebuyer, and the immigrant population represents a booming market.

“The numbers are too large to look the other way,” Troutman said. “Also, the default rate for Hispanic mortgages is very, very low.”

He estimates that the default rate for those who buy homes using ITINs is less than 1 percent. The default rate for the general population is 3.7 percent.

Ironically, the U.S. government’s restrictive immigration policy provides an added incentive to buy homes for many immigrants. In the past, immigrants traveled back and forth across the border to visit relatives and to stay in touch with their homeland. But as crossing the border has become more difficult, dangerous and expensive, more immigrants are putting down roots in the U.S., despite their illegal status.

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