The mortgage industry has long been able to adapt to changing market conditions. When interest rates rose to double-digit levels in the late 1970's, the industry made more adjustable-rate mortgages available. When the savings rate began to drop and Americans had less to put down on homes, the industry made more flexible loan products available that did not require as large a down payment. And now, as immigrants begin to comprise a larger and larger portion of our population, the lending industry is begun to introduce loans that are tailored to an immigrant population that may not have solid credit histories or Social Security numbers.

These loans, known as ITIN loans, are offered to illegal immigrants that do not have a Social Security number. They can qualify for the loans by obtaining an Individual Taxpayer Identification number (ITIN) from the Internal Revenue Service. The IRS issues these numbers to people who are required to pay taxes but are ineligible for a Social Security number. The government uses these numbers for tax purposes only. A few small banks, as well as national banks Citibank and Wells Fargo, have started to issue loans to customers who have an ITIN but not a Social Security number. Most of these loans have been issued in California, but they will probably be available in other places soon.

The process of obtaining an ITIN loan is somewhat more complicated than that of applying for a conventional mortgage. Applicants with an ITIN usually have a credit history that is less well documented. As a result, the usual background work required issuing such a loan is more complicated and more time consuming than for a conventional mortgage. In addition, fees and interest rates will tend to be higher than for other types of loans in order to compensate lenders for the additional trouble and additional risk.

While there is plenty of opposition to lending money to people who are here illegally, few would argue that a neighborhood that consists of homeowners, rather than renters, is a better neighborhood for everyone. Owners are much more likely to take care of their property and show concern for the neighborhood as a whole than are renters. Thus, any lending plan which encourages people to buy, rather than rent, is good for everyone.