Trump promises to ban mortgages for undocumented immigrants

Former President Donald Trump plans to ban mortgages for undocumented immigrants, he said in a speech at the Economic Club of New York on Thursday.

Trump claimed the measure would help address housing affordability because a “flood” of people entering the country illegally are pushing up housing costs, but undocumented immigrants only make up a tiny portion of the mortgage market.

In 2023, only 5,000 to 6,000 mortgages were made to holders of Individual Tax Identification numbers, according to a recent Urban Institute report. Those who are not legally authorized to work in the US obtain ITINs to file taxes, since they are not eligible for Social Security numbers. Most ITINs are issued to those from Latin American countries.

Some 4.3 million first mortgages were originated in 2023, according to Equifax.

It’s often very difficult for undocumented immigrants to obtain home loans, even though the USA Patriot Act of 2021 allowed banks to accept ITINs as a form of identification.

“A small yet growing set of lenders offer mortgage products to ITIN holders, often at higher interest rates and with stricter lending requirements, despite anecdotal evidence that this type of lending does not pose additional risk to the housing finance system,” the Urban Institute report states.

The former president said he would make housing more affordable by getting rid of regulations that increase costs and by opening up some federal land available for large-scale housing construction in low-tax, low-regulation zones.

He also said falling interest rates will send mortgage rates down to 3% or even lower, which will make financing less expensive for homebuyers.

Trump’s broader views on undocumented immigrants — and his insistence that he would deport millions of them — could also hamper the push to lower home prices. The residential construction industry, which is suffering from a labor shortage, has long pushed for an increase in the number of immigrants allowed to work legally in the US to bolster its workforce and enable it to build more homes. A lack of housing supply is a major factor driving up prices, especially as demand has grown in recent years.