by Housing intern Melissa Noe
When President Obama announced that undocumented immigrant parents of U.S.-born children and legal permanent residents would be allowed to temporarily stay in the United States without fear of deportation, the Latino Policy Forum and the Housing Acuerdo questioned whether or not there would be an increase in homeownership for immigrant families.
Currently, many families are not qualified for conventional loans because they lack Social Security Numbers (SSN). Instead, if these families are not ready to buy homes, they can only rely on community banks, credit unions, and private lenders for mortgages. Because these mortgages cannot be bought and sold on the secondary market, undocumented Latinos must often pay a larger percent down and a higher interest rate.
Although the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) is currently stalled by a federal court order, when implemented, these immigrant parents will receive SSNs and work permits—which may mean new opportunities opening in the mortgage market for DAPA recipients.
There are two questions that will need to be addressed within the DAPA process. How will credit be issued to these families now that they are SSN holders? Also, will the government-backed mortgage puchasers, Fannie Mae and Freddie Mac recognize these new SSN holders as ‘lawfully present’ residents? It’s still unclear if the new SSN holders will be able to transfer their built credit from alternative forms, such as the Internal Revenue Service Individual Tax Identification Number (ITIN). Undocumented immigrants commonly obtain ITINs to pay federal and state taxes, and also use them to prove identity and credit to lending institutions.undocumented Latinos must often pay a larger percent down and a higher interest rate. Although DAPA is currently stalled by a court-ordered injunction, when it is passed, eligible immigrant parents will receive SSNs and work permits. It is our hope that new opportunities will also open in the mortgage market for these DAPA recipients.
DAPA is a temporary three-year policy, which adds another layer to these complicated questions. Will this give justification to Fannie Mae and Freddie Mac to not consider these immigrants as ‘lawfully present’ in the United States? If this is true, these families would still only be able to access more restricted and expensive mortgages. This could create a problematic hierarchy within the SSN system in which one SSN holds more legitimacy than another.
The Forum will continue to monitor this situation and discuss these issues with the Housing Acuerdo. So far, we only have questions that will remain unanswered until DAPA is officially implemented. In the meantime, the Forum will continue to advocate for fair and equal access to homeownership for all those who dream of being homeowners, regardless of their citizenship status.
For any questions or comments, please contact Housing manager Savannah Clement.