Despite being in the U.S. illegally, undocumented immigrants can legally buy a house.

Certain lenders don't ask for immigration papers. And buyers using a special tax ID often don't need a lengthy credit history.

That has allowed many undocumented workers to realize the American Dream, experts said, while contributing to an upturn in the real estate market.

For Jorge and Maribel, a couple from Mexico who have lived illegally in Houston since 1996, an Individual Tax Identification Number, known as an ITIN, and a Texas driver's license were enough to secure their mortgage, allowing them to purchase a home in 2002.

"I was really surprised when I found out that it could be done," said Jorge, who bought his home through Gloria Castrejón's realty firm, La Palma.

Like Maribel, Jorge asked to be identified by only his first name.

The fact is, it can be easier for many undocumented immigrants to buy houses than to get jobs.

To complete the purchase, they don't need a Social Security number.

An ITIN, their last two yearly tax returns, an official ID such as a consular registration card and a few credit references, such as electricity and telephone bills, are enough to apply for a mortgage and buy a home, according to experts.

"Residency has never been a condition to purchase a home," said Frances Martinez Myers, president of the National Association of Hispanic Real Estate Professionals, which is based in Washington, D.C.

"Being in the country legally or not is not an issue when you are buying a house."

If a buyer does provide a Social Security number, real estate agencies and lenders may request proof of legal status, according to Myers. But that is usually not the case with an ITIN.

"It is not illegal for an undocumented immigrant to buy a house. What is illegal is to do so using a false Social Security number," Houston immigration lawyer José Vega warned.

Although real estate deals involving non-U.S. residents have been going on for a while, Myers said that banks have only recently begun processing mortgages with ITIN numbers.

The Internal Revenue Service started issuing ITIN numbers in 1996 to enable people without Social Security numbers, including nonresident investors and illegal immigrants, to pay U.S. taxes, according to agency spokesperson Irma Trevino. The IRS has issued 9 million ITIN numbers.

Several real estate experts, including Wendy Buitron of the Texas Department of Banking, which oversees the state's financial system, confirmed that using an ITIN to obtain a mortgage is legal.

 

Real risks

For illegal immigrants, however, buying a home can carry risks.

 

The biggest, said Houston real estate consultant Óscar González, of González Group, is deportation. If homeowners are forced to leave the country, they might be unable to afford payments and, therefore, could lose their home, Myers said.

Fraud is another risk. Paco Felici, spokesman for the Texas Attorney General's Office, said a Dallas operation that was selling homes to Hispanics without giving them property titles was busted in June.

Another caveat for undocumented buyers: Financial institutions tend to charge illegal immigrants higher interest rates — sometimes several points higher — than other borrowers.

As for banks and lending institutions that grant ITIN loans, the risk is low, experts said. For example, Banco Popular limits ITIN loans to a maximum of $150,000, spokesman Juan Carlos Cruz said.

Banks approach such mortgages differently.

Banco Popular, which has been issuing ITIN mortgages since 1997, does not believe it is the bank's responsibility to determine the immigration status of a person, Cruz said.

 

Checking the papers

That view is not shared by Julie Davis, spokeswoman for Bank of America, who said it is her bank's policy to verify the immigration papers of a borrower when it processes ITIN mortgages.

 

"We do not loan money to people who are in the country illegally," said Davis, adding that customers can open a checking account with Bank of America by using a consular registration document as identification.

According to the U.S. Census Bureau, 48 percent of the more than 40 million Hispanics in this country were homeowners in 2002, the last year for which such figures are available.

Although some anti-immigration groups claim that those in the country illegally pose an economic burden, a study by the National Association of Hispanic Real Estate Professionals said that home purchases by undocumented workers could result in $60 billion in mortgages over the next few years.

The total value of mortgages granted for home purchases in 2005 was $1.5 trillion, according to the Mortgage Bankers Association in Washington, D.C.

Estimates on the number of illegal immigrants in the U.S. vary.

The U.S. Census Bureau puts the figure at 11 million.

The Pew Hispanic Center, a Washington D.C.-based think tank, puts it at 12 million.

The Hispanic real estate group's study estimates more than 150,000 illegal immigrants who rent housing could afford a $98,000 home.

González is convinced that Hispanics, including illegal immigrants, are revitalizing the U.S. housing market.

"The real estate companies are focusing on the nontraditional buyers. Things are slowing down, and the focus has shifted to the Hispanic home buyer because of their numbers," he said.

Castrejón, Jorge and Maribel's agent, said one in five of her clients are undocumented immigrants. Castrejón said she sells 30 to 40 properties a year.

"This is much better than renting," Maribel said.

"We're not throwing our money away anymore."

olivia.blanco@chron.com

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