Former President Donald Trump recently announced plans to ban mortgages for undocumented immigrants as part of his efforts to address housing affordability. During a speech at the Economic Club of New York, he claimed that the influx of people entering the country illegally was driving up housing costs. However, data shows that undocumented immigrants only make up a small portion of the mortgage market, with only 5,000 to 6,000 mortgages being issued to holders of Individual Tax Identification numbers (ITINs) in 2023.
Most ITINs are issued to individuals from Latin American countries who are not legally authorized to work in the US but use the ITINs to file taxes since they are not eligible for Social Security numbers. Despite the USA Patriot Act of 2021 allowing banks to accept ITINs as a form of identification, it remains challenging for undocumented immigrants to obtain home loans. Some lenders offer mortgage products to ITIN holders, but they often come with higher interest rates and stricter lending requirements.
In his speech, Trump outlined additional measures to make housing more affordable, including eliminating regulations that increase costs and opening up federal land for large-scale housing construction in low-tax, low-regulation zones. He also predicted that falling interest rates would lead to lower mortgage rates, making financing less expensive for homebuyers. However, his broader views on undocumented immigrants, particularly his stance on deporting millions of them, could hinder efforts to lower home prices.
The residential construction industry, which is facing a labor shortage, has advocated for an increase in the number of immigrants allowed to work legally in the US to help address the housing supply shortage. A lack of housing inventory has been a significant driver of escalating home prices, especially as demand continues to rise. Trump’s immigration policies and rhetoric may impact the industry’s ability to expand its workforce and meet the growing housing needs of the population.
As the former president targets undocumented immigrants in his housing affordability agenda, critics have pointed out that they represent only a small fraction of the mortgage market. Advocates for inclusion argue that restricting access to mortgages for this group could have negative consequences for the overall housing market. It remains to be seen how Trump’s proposed measures will be implemented and what impact they will have on housing affordability and access to home loans for marginalized communities.
