Citibank Provide Cheap Home Loans to Illegal Aliens

Citibank is quietly providing home loans to illegal aliens at better rates than they offer to citizens. Janine Zúñiga reported this in the San Diego Union-Tribune almost a month ago but went below my radar screen.

A major U.S. bank has funded its first home loans to undocumented Mexican immigrants in San Diego County in a move that targets a lucrative, wide-open market while providing new grist for the debate over illegal immigration. The local program, which uses tax identification numbers instead of Social Security numbers, is similar to programs run by small lenders — and two state agencies — around the country that have distributed millions of dollars to undocumented immigrants over the past few years.

“There is a huge untapped market out there, but it is a controversial program,” said Sarah Lumbert, office director of San Diego’s ACORN Housing Corp., part of a national group working with Citibank to provide tax-ID loans. ACORN members, advocates on housing issues for low-and moderate-income people and Citibank have quietly recruited applicants in the county for more than a year. Their program has ramped up slowly because applicants need to establish credit and hunt for an affordable home.


Only two tax-ID mortgages have been processed locally, but about 10 local Citibank loans to undocumented immigrants may soon be finalized with the help of ACORN, the Association of Community Organizations for Reform Now. The nonprofit organization receives much of its funding from the Department of Housing and Urban Development. Tax-ID numbers are used by those who need to report federal taxes but are not eligible for a Social Security number, usually because they are undocumented. Until the past few years, lenders would not — and most still do not — accept anything but a Social Security number for home loans. Wells Fargo recently seized on the market, joining Citibank as the only nationwide banks offering tax-ID loans. Wells Fargo started its pilot tax-ID loan program in Los Angeles and Orange counties in December.


Often, family members pool resources to afford the county’s pricey market. With Citibank, as many as eight people can sign for a mortgage.


[T]here has been no movement by Washington lawmakers to put a stop to the tax-ID loans, and the government routinely issues tax-ID numbers. The IRS has issued such numbers since 1996 to foreigners to encourage them, regardless of their immigration status, to file tax returns. There is nothing illegal about the loans. Congress has passed a series of fair-lending acts, similar to the 1977 Community Reinvestment Act, that ensure equal access to mortgages for low-income and minority households.


After frantic calls for help, Estela found ACORN Housing. She received a 30-year fixed mortgage at 5 percent interest, 1 percentage point lower than the standard rate. It costs $780 a month. Estela’s home was appraised at $565,000.

Something’s not adding up here: $565,000 at 5% over 30 years should mean a mortgage payment of $ 3,033.04 a month. At the standard rate of 6%, it would be $3,387.46. Even at 5%, the most one could borrow for $780 a month is $145,100. (See any mortgage rate calculator.)

Hat tip to Digger, who is outraged at the banks for loaning the money to criminals and, along with Lonewacko, would like to see a nationwide boycott.

I blame the Congress, however, and the public at large. Citibank and Wells Fargo clearly see an untapped market here and are trying to make a living. While I don’t understand how they can justify lending money to illegal aliens at a lower rate than offered to citizens, it’s really their business so long as they are within the law.

The problem, then, is the law. Why do we pretend that we do not want undocumented workers in the country and have a large Border Patrol on the one hand and then mandate educating, collecting taxes from, issuing drivers licenses to, and other such things for them? Either they are criminals or they are not. The current policy makes them technical criminals but simultaneously sends the signal “please come and take our low paying, menial jobs.”

It’s time to pick one.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Yep.

    Although I really think we have picked–and what we have picked is: “please come and take our low paying, menial jobs”–and we have done so for a variety of reasons, not the least of which being that the economic forces in play have pulled us there and will continue to do so. Not to mention that to really chose the other option would be far more expensive and distasteful than many are willing to face.

  2. arky says:

    “Something’s not adding up here: $565,000 at 5% over 30 years should mean a mortgage payment of $ 3,033.04 a month. At the standard rate of 6%, it would be $3,387.46. Even at 5%, the most one could borrow for $780 a month is $145,100. (See any mortgage rate calculator.)”

    It said it was appraised at $565k. Maybe she got a sweet deal on the purchase price as well, and/or put down a substantial down payment (which might affect the interest rate as well…)

  3. James Joyner says:

    arky: The story doesn’t say what the loan amount was. It’s doubtful an illegal alien housecleaner has $400,00 to put down but it does make it sound like some sort of re-fi on an older loan, so maybe the original purchase price was much lower.

  4. Digger says:

    I’m thinking they’re subsidizing her monthly payments as well, that’s why it’s only $700 a month. Since when can a housekeeper afford a 500k+ house?

  5. James Joyner says:


    I can’t imagine Citibanc subsidized the payments. Why would they? It’s possible ACORN did, however.

    Or it may be that she bought the place for a whole lot less and it’s just appraised at that much now.

    Estela, the first to secure a local loan, is a house cleaner from Mexico City. She has lived, worked and paid taxes in San Diego County for 13 years but has no legal right to be here. However, Estela does have a tax-ID number.

    ACORN Housing officials disclosed her identity to The San Diego Union-Tribune on the condition her full name not be used. Six years ago, Estela asked an American friend to help her buy a home. She paid the costs, his name was on the loan and title. But a tax lien frightened her friend, who transferred the title to Estela. When the mortgage company found out she was an illegal immigrant, it demanded full payment.

    Estela thought she would have to sell her three-bedroom home or lose it. That is, until she heard about the tax-ID loan program. In October, Estela signed the final documents for a new mortgage issued by Citibank.

    It doesn’t say what it cost six years ago. Likely much less. But, still, one would think out of reach for a housekeeper.

  6. Scott_T says:

    I doubt that the home was actually $565K, probably like $265K. A $565K home in Riverside CA (about 100 miles North of SD but just as popular and pricey) would be a 3,000 sq.ft. home, 5bed, 3bath (with no yard to speak of).

    A 3 bed, 2bath home could probably be gotten for $265K easily in many cities.

  7. LJD says:

    Seems we’re asking the wrong question here. If they’re ILLEGAL, why do they HAVE TIN #s?

    On July 1, 1996, the IRS began assigning individual taxpayer identification numbers (ITINs) to aliens who are otherwise ineligible for SSNs but who need taxpayer identification numbers for tax purposes. See generally 61 Fed. Reg. 26,788 (May 29, 1996).

    An ITIN is a tax processing number for certain nonresident and resident aliens, their spouses, and dependents. It should be used only for income tax purposes. ITINs do not entitle aliens to social security benefits or the earned income tax credit, create any inferences regarding aliensÂ’ immigration statuses, or give aliens a right to work in the United States.

    If ITINs do not ‘create any inferences regarding status’ or ‘give the aliens the right to work’ why on God’s green Earth would some one who is not allowed to be here legally need to have one?

  8. James Joyner says:

    LDJ: Because we’re trying to have it both ways. They’re not entitled to be here but we want them to pay taxes. But not collect Social Security.

  9. DC Loser says:

    James, that’s a great money making idea. We should have more illegal aliens here so we can tax them and not have to pay anything out. If we get enough of them pretty soon we’ll have a budget surplus 😛