How to Use a Tax ID Number to Get a Mortgage

Federal Tax ID numbers are much like social security numbers. They are used to track the financial behavior of a business or individual. In some cases, a federal Tax ID number can be used to obtain financing. In the majority of cases, a Tax ID number will need to have some positive credit history in order for a borrower or business to get approved for financing. However, with the rise in immigration--especially in southern states like Florida and Georgia--mortgage companies have begun loosening restrictions on Tax ID financing.

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Step 1

Obtain a Federal Tax ID number. In some cases--especially for undocumented immigrants--a Tax ID number is assigned to you. This is normally done so that you can pay taxes.

Step 2

Obtain small amounts of credit with the Tax ID number. Most lenders will not offer large-scale financing--like a mortgage--without some credit history attached to the Tax ID number. Apply for small-limit credit cards and small personal loans.

Step 3

Pay all bills and accounts attached to the Tax ID number on time. Pay off credit cards whenever possible. Continue to use credit accounts on a Tax ID number for at least six to 12 months.

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Step 4

Research mortgage lenders who specialize in Tax ID mortgage financing. Due to the risk involved, most large banks--like Bank of America, Wells Fargo and CitiBank--are not yet participating in full-scale Tax ID mortgage financing. Start with local credit unions--especially those you are a member of--and finance companies that cater to borrowers with less than perfect credit.

Step 5

Apply to three to five lenders. This will assure multiple options. Assess your financial goals and your monthly and annual budget. Find and choose the program that best fits your needs.

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Step 6

Prepare to pay a much higher interest rate that a conventional mortgage--sometimes even 3 to 4 percent above the national average. Similarly, you'll likely need to pay more in origination fees and closing costs due to the risks inherent in Tax ID financing.

Things You'll Need

  • Federal Tax ID

  • Employment verification (2 years of W2s, 6 recent paychecks, tax returns)

  • 12 months of bank statements

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