ITIN mortgage loan helps residents without a SSN become homeowners

Jun. 29—Update: This article has been updated to correct inaccurate information about high rents in the Hispanic community.

A new Security Federal Savings Bank loan program looks to even the playing field for Cass County residents who do not have a social security number, including many in the Hispanic community.

For residents who do not have an SSN, including undocumented immigrants, it is almost impossible to receive a loan from a bank. Many do have individual taxpayer identification numbers (ITIN), however. Security Federal Savings Bank, located at 314 4th St., has created a new mortgage loan program that uses ITINs instead of social security numbers to help those residents become home owners.

"We recognized that is a big segment of the communities that we serve, the market area that we serve," said Annette Russell, president and CEO of Security Federal Savings Bank. "As a community bank we want to be able to provide products and service that meet the needs of all community members."

The origins of the program came about because the Hispanic population had grown by 40% in both Cass and Tippecanoe counties over the past decade and there was general frustration among that populace towards being ineligible for a loan.

"So that somewhat prohibited them from being able to save for any future ownership because it was all going towards rent in which they were building no equity, no ownership," said Russell. "So we are trying to better position them to provide that financial stability and ownership so that they can build equity."

The loan program began in the fall of 2021. Those seeking a loan must provide a valid form of identification other than a driver's license, a documented source of income, proof of employment and proof of credit.

Alternative sources of credit can be used to help those who have not established credit. Bryan Martinez, the Logansport bank's loan originator, described alternatives as a monthly payment to Netflix, something purchased on contract, anything that shows the applicant can make a monthly payment.

"We have a credit builder loan that we provide to our ITIN customers," said Julia Snipes, the bank's marketing director. "That is a secured loan that allows them to take on additional assistance for items that may help in their journey to homeownership. If they have zero credit but they also don't have the alternate credit that we need to underwrite the loan, that credit builder loan can help them at the very beginning of the journey."

There are also options to refinance a loan under the program. Martinez was able to help Jose Garcia and Cristina Salazar refinance their home, lowering their payments by nearly $600 a month.

Garcia said there were companies who would help those in the community buy a house but would charge high interest rates, saying that 10% interest was usually the best case scenario.

The family paid their monthly loan but the interest was so high they never made any ground. With Security Federal's help they now can work on paying down the principle loan while also saving up money.

They said they considered the bank like a family because of the help they had been given.

Lafayette residents Jose de Rios and Maria Aguilar had lived in their rental for seven years when the landlord decided to sell the house. They had limited time to find a new place to live and move. One day their daughter saw an advertisement for the loan on Facebook and encouraged her father to apply. Their local Security Federal Savings Bank gave them a loan and they were able to get a new home.

"We take pride that we are able to offer this to the Hispanic community," said Lucia Vela, loan originator at the Lafayette location. "A lot of times individuals perceive it as too challenging or they worry they won't qualify. The reality of it is you just need to try. See where you are at. Maybe you won't qualify today but we can come up with a game plan to get you to the finish line."

Vela said the Hispanic population is very financially savvy and responsible with their money. She said it was important to help them overcome the roadblocks they encounter so that they can become homeowners.

"We found as an institution that it is beneficial, not just for the bank, but for the community that we serve," she said.

The bank is making a solid push to serve the Hispanic population, from hiring bilingual employees, modifying traditional programs to meet the needs of new demographics and printing forms in Spanish. They also formed a Diversity Equity and Inclusion Task Force in 2021.

"That is our attempt to make sure individuals who are either not being served or who are being underserved by the financial services industry are being fairly served," said Russell. "We want to make sure that everyone feels like they are welcomed when they walk into a branch of Security Federal, that they are being treated fairly and that we are providing them a product that is in their best interest."

Garcia hopes people will be informed about the opportunity and trust the process. Sometimes for people it is difficult to trust, he said.

"This opportunity has not been in Logansport," said Garcia. "There is a big door open for people who have not had the opportunity to do this before."