Latino households are poised to drive 70 percent of net homeownership gains through 2040. But for the projected growth in Latino homeownership to be achieved, the mortgage market needs to be adapted to lower systemic barriers. One such barrier is a lack of mainstream mortgage financing for Individual Tax Identification Number (ITIN) holder households, a majority of whom are Latino.

We set out to understand the ITIN mortgage market through interviews and focus groups with 23 market stakeholders. We found the following:

• The current market for ITIN loans is small, but our interviews and estimates suggest that it could be significantly expanded. We estimate that 5,000 to 6,000 ITIN mortgages were made in 2023, but this could be up to 73,000 to 88,000 if market barriers were removed.
• ITIN loans perform well and are responsibly underwritten, according to prior research and our interviewees’ accounts. Performance data are needed to quantitatively demonstrate the low delinquency rates to encourage market entry.
• The lack of a significant secondary market for ITIN loans is the largest barrier to expanding the market. The government-sponsored enterprises Fannie Mae and Freddie Mac largely do not buy ITIN loans, and the Federal Housing Administration does not insure mortgages if the borrower cannot prove legal US residency. Changing these policies can bring much-needed liquidity to the ITIN mortgage market.