Anyone living in the United States, earning an income, and paying U.S. taxes, but not eligible for a Social Security number, should know about jumbo ITIN loans. This is a special mortgage program that allows individuals and families to purchase a home and enjoy all the benefits of homeownership.
Usually used by resident aliens and non-resident aliens, this could be the perfect option for your next purchase.
Jumbo ITIN Loans Available
Previously, these loans were only available as conventional loans. Later in the year we announced that ITIN loans supported by the FHA were available. However, these loans, because they are supported by the federal government, have specific loan limits.
Now you can get jumbo-loan amounts using an ITIN to qualify, which means large amounts could be available.
ITIN Loans: Everything You Should Know About these Useful Mortgages
ITIN loans are simply mortgage programs that, instead of using a Social Security number, use an Individual Taxpayer Identification Number. Essentially, this number allow people who do not qualify for a Social Security number to pay taxes and interact with the IRS.
These numbers are usually used by resident aliens who are filing taxes in the Unites States but, because of their citizenship status, do not qualify for a Social Security number. ITINs can also be used by dependents or spoused of U.S. citizens and resident aliens or non-resident visa holders. They help the individual who is earning an income in the United States to pay their appropriate taxes, but they can also be used to start a business, create a retirement account, and perform other functions.
They can also be used to initiate a home loan.
Note: ITINs are Different from an EIN
The Individual Taxpayer Identification Number is different than, although sometimes confused with, an EIN. An EIN is used by business owners, freelancers, contractors, and other self-employed individuals who do not earn a typical paycheck from an employer.
Requirements for Loan Approval
These loans are only available to people with a credit score of 620 or higher. While they may not be a low-credit option, they do provide an excellent financing option for people without a Social Security number who may not have outstanding credit. (620 is considered, at least by Experian, as fair but not good credit.)
These loans have different downpayment requirements based on your credit score. While the minimum is 620, if your score is higher you can make the purchase with a smaller downpayment.
If your credit score is…
….620 to 659, you need a 25% downpayment.
The first tier is for people with credit scores of 620 to 659, which is a fair number if not considered “good” by some organizations. If you fall into this category, you’ll need to bring a 25% downpayment for the purchase. Because these loans are for jumbo amounts, let’s suppose you are making a purchase of exactly $1 million; with this tier, you would need $250,000 as a downpayment. Fortunately, you can use gift funds on these loans, although there are limits on gifts. (See below.)
….660 to 699, you need a 20% downpayment.
Anyone with a score above 659 can enjoy a lower downpayment requirement, which makes your jumbo purchase more affordable. If your score is between 660 and 699, you can make the purchase with a 20% downpayment. This is still a large downpayment compared to other loans, but it’s not uncommon for jumbo financing. If you use the example above ($1 million purchase), this would mean a $200,000 downpayment, a reduction of $50,000 for the previous tier.
…700+ Score, you need a 15% downpayment.
Experian considers a 700 score “good,” while 740 or higher is “very good.” This shows you are a reliable borrower, and as such you are able to make the purchase with a lower downpayment. Anyone with a credit score of 700 or more can make the purchase with only a 15% downpayment. At $1 million, this means you would need $150,000 on your jumbo ITIN loan. From the first tier, this is a reduction of $100,000, so it’s certainly beneficial to improve your score.
Three Months of Reserve Required Regardless of Credit Score
There is one important requirement for these loans: three months of cash reserves. Regardless of your credit, you’ll need to have, in a readily-available account, savings that equal three months of mortgage payments. So if your mortgage payment is $4,000, you’ll need at least $12,000 in savings.
You will also need a clean history of payments, and you cannot have had late payments within the past six months.
Gift Funds Allowed
One of the top benefits for these jumbo ITIN loans is that gift funds are allowed. Gift funds can be used as downpayments, closing costs, and other fees, and they are particularly useful on loans that require larger downpayments. While gift funds are allowed, 5% of the funding must come from the borrower. (Talk to our staff for specifics on how much gift funding is allowed.)
Available in Many States
While loan availability can always change, as of writing this article jumbo ITIN loans are available in:
- District of Columbia
- North Carolina
- New Jersey
- South Carolina
*Note: State accessibility is always changing. For current and accurate availability of ITIN loans, contact our staff.
Primary and Second Homes Only
These loans are only available for primary and secondary homes, and they are not intended to be used as investment loans. Investment loans create enhanced risk, so there may be more restrictions. However, if you do not have a Social Security number but are interested in purchasing an investment property in the United States, we can likely find a loan option that would fit your needs.
Providing ITIN Loans in San Diego and the Surrounding Area!
Jumbo ITIN loans are perfect for purchasing your dream home in the United States. Contact our helpful team today and we’ll make sure you find the mortgage that suits your specific goals!