Inclusiv/Mortgage Eases Credit for Immigrants
But Filene finds few credit unions touting ITIN loans to immigrants on their websites.
Inclusiv/Mortgage announced Thursday it is opening credit to more low-income and immigrant households through a secondary market program it launched 18 years ago.
For immigrants who use an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number, Inclusiv/Mortgage is offering a 5/1 Adjustable Rate Mortgage with rates comparable to those using a Social Security Number.
Other changes for all borrowers include:
- Lowering its loan minimum requirements to help borrowers in lower-priced areas qualify.
- Lowering its minimum credit score to 580 from 620.
- Raising the maximum debt-to-income ratio to 38% from 35%.
Inclusiv also created a 10/1 ARM for those with Social Security numbers. Bob Mundy, director of Inclusiv Mortgage, said ARMs are usually lower than fixed-rate mortgage loans when rates are high, resulting in a lower payment and making it easier to qualify.
“We believe these changes will help more borrowers qualify for home loan financing, especially in the current home market where increased prices and low inventory make it difficult for under-resourced people to get to the finish line,” Mundy said.
The move comes as a study released Thursday by the Filene Research Institute of Madison, Wis., found only 28 credit unions marketing loans to immigrants on their websites during a web-scraping exercise last September.
Census data shows Hispanics made up 19% of the U.S. population in 2021, up from 10% in 2010. And they’re younger. A 2020 Census demographic survey released Thursday shows that half of Hispanics are 30 or younger, compared to a median age of 41.1 for others.
The Filene study said the lack of comprehensive ITIN lending services by credit unions may be the result of “compliance ambiguity, a lack of awareness of the opportunity, or a lack of resources or commitment.”
“Increasing numbers of banks are now offering these products, but many credit unions still do not offer ITIN lending. Marketing these financial products to members and potential members is not widely practiced,” it said.
Most credit unions begin ITIN programs with auto loans, then offer personal loans and credit cards, according to Filene.
That makes the Inclusiv/Mortgage program unusual.
New York-based Inclusiv, which represents community development credit unions, founded the mortgage arm in 2005 for low- and moderate-income borrowers. It acts as a secondary market for credit unions, buying loans that meet its parameters.
As of April, it held $30 million in home mortgages originated by 35 affiliated community development credit unions. That’s up from $20 million in mortgages originated by 30 credit unions in January.