Former President Donald Trump announced his plans to ban mortgages for undocumented immigrants during a speech at the Economic Club of New York. Trump believes this measure will help address housing affordability, as he claims that an influx of undocumented individuals entering the country is driving up housing costs. However, data shows that undocumented immigrants make up only a small portion of the mortgage market, with only 5,000 to 6,000 mortgages issued to holders of Individual Tax Identification numbers in 2023, mainly from Latin American countries. This group of individuals obtains ITINs to file taxes since they are not eligible for Social Security numbers.
While Equifax reported that 4.3 million first mortgages were originated in 2023, it remains 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 limited number of lenders offer mortgage products to ITIN holders, often with higher interest rates and stricter lending requirements. The Urban Institute report suggests that this type of lending does not pose additional risk to the housing finance system.
Trump also mentioned his plans to make housing more affordable by eliminating regulations that increase costs and opening up federal land for large-scale housing construction in low-tax, low-regulation zones. Additionally, he predicts that falling interest rates will lead to mortgage rates dropping to 3% or even lower, reducing the overall cost of financing for homebuyers. However, Trump’s broader stance on undocumented immigrants, including his intention to deport millions of them, may impact efforts to lower home prices.
The residential construction industry, which is currently facing a labor shortage, has advocated for an increase in the number of immigrants allowed to work legally in the US to bolster its workforce and increase housing supply. A lack of available housing is a significant factor contributing to rising prices, particularly as demand continues to grow. Trump’s proposed ban on mortgages for undocumented immigrants, combined with his broader immigration policies, could potentially hinder efforts to address the housing affordability crisis.
Ultimately, the debate over mortgage access for undocumented immigrants underscores the complex intersection of immigration policy and housing affordability. While Trump’s proposal aims to alleviate housing costs, critics argue that it may exacerbate existing challenges within the housing market. As policymakers continue to navigate these issues, finding a balance between addressing the needs of undocumented immigrants and promoting housing affordability for all remains a key priority within the broader discussion on immigration and housing policy.
