Undocumented residents being recruited for loans
By Janine Zúñiga

UNION-TRIBUNE STAFF WRITER
February 6, 2006

Home-buying industry busy wooing Latinos

A major U.S. bank has funded its first home loans to undocumented Mexican immigrants in San Diego County in a move that targets a lucrative, wide-open market while providing new grist for the debate over illegal immigration.

The local program, which uses tax identification numbers instead of Social Security numbers, is similar to programs run by small lenders – and two state agencies – around the country that have distributed millions of dollars to undocumented immigrants over the past few years.

“There is a huge untapped market out there, but it is a controversial program,” said Sarah Lumbert, office director of San Diego’s ACORN Housing Corp., part of a national group working with Citibank to provide tax-ID loans.

ACORN members, advocates on housing issues for low-and moderate-income people and Citibank have quietly recruited applicants in the county for more than a year. Their program has ramped up slowly because applicants need to establish credit and hunt for an affordable home.

But the market is vast and the level of interest in the program is high, especially since the loans typically offer below-market interest rates, down-payment assistance and require no mortgage insurance.

The Pew Hispanic Center estimated that 10.3 million undocumented immigrants were living in the United States as of March 2004. And a study that year for the San Diego-based National Association of Hispanic Real Estate Professionals concluded that nearly 216,000 undocumented immigrants could become homeowners if they had better access to the home-buying process, collectively acquiring an estimated $44 billion in mortgages.

Although there are no reliable estimates of the number of undocumented residents in San Diego County, Latinos make up 29 percent of the population, according to the U.S. Census Bureau. In South County, that figure is 54 percent. About one-quarter of homes in South County are owned by Latinos, according to 2000 census figures.

Only two tax-ID mortgages have been processed locally, but about 10 local Citibank loans to undocumented immigrants may soon be finalized with the help of ACORN, the Association of Community Organizations for Reform Now. The nonprofit organization receives much of its funding from the Department of Housing and Urban Development.

Tax-ID numbers are used by those who need to report federal taxes but are not eligible for a Social Security number, usually because they are undocumented. Until the past few years, lenders would not – and most still do not – accept anything but a Social Security number for home loans.

Wells Fargo recently seized on the market, joining Citibank as the only nationwide banks offering tax-ID loans. Wells Fargo started its pilot tax-ID loan program in Los Angeles and Orange counties in December.

Chuck Lemoine, a Wells Fargo senior vice president, said providing tax-ID loans is legal and that reaching out “is not only the right thing to do, it’s good business.”