Latest / USA House Partners Podcast / Understanding the New Banking Landscape for Home
Transcript
- Broker Greg: If you came to this country, built a career, and filed your taxes every single year, and now you're hearing that banks may start asking about your citizenship, you might be wondering if owning a home just slipped out of reach. Here's the short answer: No. But the rules did change this year, and the people who understand those changes are the ones who will still be getting the keys handed to them. I'm broker Greg, and I want to welcome you to the USA House Partners podcast on our homeowner nation listeners. For those of you who Don't fit inside the traditional bank loan box. Let's get you home. Today we're talking about ITIN holders, green card holders, and foreign national buyers. What changed, what didn't, and what your options actually look like right now. Let's start by clearing up the noise because a lot of what's going on around social media isn't accurate, and bad information leads to bad decisions. First of all, if you don't know what an ITIN or individual taxpayer identification number is, it is a nine-digit number the IRS issues if you need a U.S. taxpayer identification number for federal tax purposes. But you aren't eligible for a Social Security number. Here's what actually happened. In May of this year, a federal executive order was signed about how banks handle customers who may not have lawful immigration status. Then on June 5th, the Treasury Department's Financial Crimes Office, FinCEN, sent banks an advisory listing red flags to watch for. Now here's the part most coverage gets wrong. That order does not require your bank to verify everybody's citizenship. There is no blanket rule. What it created is a risk-based approach, meaning a bank may ask more questions when other warning signs are already present. Here's where I-TINs come in. The advisory says that when someone uses an I-TIN in place of a social security number or work authorization, a bank may treat that as one of the risk factors calling for enhanced due diligence. In plain English? Just more questions, maybe more paperwork. But write this down. An ITIN is still a valid number for opening a bank account. The advisory did not ban ITIN accounts. And it says plainly that it's not aimed at U.S. citizens, green card holders, or anyone who is authorized to work. If you hold a green card, that advisory is not about you. There's also a bill in the U.S. Senate introduced back in March that would require banks to verify citizenship or lawful status for a new account. While grandfathering existing accounts, it has not passed. It's a proposal. And regulators are scheduled to look at rules on foreign consular ID cards around the middle of November. So why does a show about buying homes care about bank accounts? Because every home purchase runs through one. Your down payment has to be documented in an account. Lenders review months of bank statements. And with our private investor network, your monthly payment comes out automatically from your bank account. If your banking gets disrupted, your home purchase can stall. I'm not here to tell you about how to feel about any of this. That's not what this show is. I'm here to make sure you have the facts so you can plan now. The mortgage side changed too, and some of that started last year. Back in May of 2025, HUD removed the non-permanent residence category from FHA loans. That means people here on work or student visas like H1B, F1, who used to qualify for FHA's 3.5% down loans no longer can. Green card holders still can. US citizens still can. And then this summer, Federal Consumer Financial Regulators said lenders may consider immigration status when judging whether a borrower can repay a loan over time. And the bank regulators follow with guidance on lending to borrowers who are not authorized to work. Put that together and here's the reality. If you're an ITIN borrower, a visa holder, or a foreign national, the traditional bank door just got a little bit more narrow. Not closed everywhere, but narrower. If that's a word, narrower. More documents, more questions, more, we'll get back to you. And that's exactly why alternative paths matter right now. Let me walk you through three buyers. These are composites, illustrations, not specific clients, but they're built on situations we see every week. Buyer one, Maria, green card holder, thin U.S. credit. Maria's had her green card for three years, full-time W-2 job, solid income. The problem? Her U.S. credit history is thin, a couple of years, one credit card, a score around 610. A traditional bank looks at that file and hesitates. Through our private investor network, there's a lease-to-owned path that starts at a 580 credit score with 3.5% down. On a $250,000 home, that's about $8,750. After 18 on-time payments in a row, she has the option to convert into a 40-year purchase contract. And here's what matters most for people like Maria. Every payment is reported to all three credit bureaus. The house itself becomes her credit building tool. Buyer two, Ahmed and Sophia. I-TIN, self-employed, strong savings. Ahmed is self-employed. He files his taxes every year with an I-TIN. Steady business, real money in the bank. But no social security number means most conventional lenders won't even run the file. Our network has a program built especially for ITIN borrowers, foreign national, expatriates, and relocating professionals. It's designed for stronger files. Think a credit score or foreign equivalent and 15% down. On that same $250,000 house, about $37,500. It's not the easiest bar to clear, but it's a real door when most doors are shut, and it goes as high as $3 million for higher price homes. Buyer three, James, relocating professional, no U.S. credit. James is relocating here from overseas for a job. Maybe with one of the manufacturers in our region. Excellent credit back home. Zero U.S. credit. Under that same program, a foreign credit equivalent can count subject to underwriting. So what do all three have in common? A plan that doesn't depend on fitting a banker's checklist. Plus a few protections most mortgages don't come with. Hardship protection that can cut the payment in half for up to three months if you lose your income. Up to two years of counseling after you move in from a HUD approved agency. And a requirement that the home's major systems have at least five years of life left. So you're not buying a money pit. And I'll be straight with you about the trade offs, because that's what we do here. These programs cost more than a prime bank loan. That's a rate premium. And There's rate premium and program fees. And on the 40-year contract, the investor holds title until you pay it off or refinance. You hold what's called an equitable ownership in the meantime. These are real trade-offs, and you should understand everyone before you sign anything. For a lot of families, owning now and building equity beats renting for five more years, waiting for a bank to say yes. But that's your decision to make with your eyes wide open. So here's your homework. Five things whether you're buying next month or next year. One, know what your bank has on file. If you opened your account with an ITN and you've since received a Social Security number, update that record. Two, don't panic move your money. Suddenly closing accounts or shifting big chunks of cash around can look exactly like the patterns banks are being told to watch for. Keep your accounts steady and active. Three, build your pay per trail now. Tax returns, pay stub, twelve months of bank statements. Keep copies somewhere you can grab them fast. Four, put your rent to work. If your landlord doesn't report your rent payments, ask about a rent reporting service. Some of the newer credit scoring models now count it. And five, If your status is anything other than a USA citizen or a green card holder, talk to a qualified immigration attorney before you apply for a mortgage. I'm a real estate broker, not a lawyer, thankfully. And this is exactly the kind of question that deserves a legal professional. If any of this sounds like you or someone in your family, your church, your workplace, I'd be happy to help you sort through which path fits. No pressure, no obligation. Reach out by email at Greg at USA Housepartners dot com. And we'll walk through your situation and see what our private investor network can do. And if the answer is not yet, we'll tell you that too, and help you build the plan to get there. As we close out and go into our week, I'd like to remember the words of Proverbs chapter 3, verses 33 and 34. The Lord blesses the home of the righteous with the wise inheriting honor and the humble receiving favor. This is Broker Greg with the USA House Partners Podcast. We'll see you next week.