HUD Says FHA Again Supports DACA Mortgages
In one of the last acts of the administration of former President Donald Trump, the US Department of Housing and Urban Development declared Wednesday that the Federal Housing Administration will once again support mortgage loans for immigrants under the Deferred Action for Childhood Arrivals (DACA) program.
HUD has stated that DACA recipients who are legally authorized to work in the United States are eligible to apply for FHA-backed mortgages.
“Earlier today and before noon, Secretary Carson and I posted a waiver and other material on the HUD website that clearly states that recipients of DACA status are now eligible to apply for mortgages insured by the HUD. Federal Housing Administration, ”former HUD Undersecretary Says Brian Montgomery. “This notification marks the first time since the inception of DACA in 2012, making it clear that recipients of DACA status can apply provided they meet other FHA requirements.”
Prior to today’s announcement, the FHA Single-Family Housing Handbook included this statement: “Non-US citizens without legal residency in the United States are not eligible for FHA-insured mortgages.” This language was incorporated into the FHA manual by the Obama administration in September 2015, although it was first incorporated into the FHA guidelines in 2003.
The problem, however, was that legal residency predated the creation of the DACA program, which created controversy over how the FHA should handle mortgages for DACA recipients. In 2019, HUD declared that the FHA would no longer support DACA mortgages after months of uncertainty.
“Determining citizenship and immigration status is not the responsibility of HUD and the Department relies on other government agencies for this information,” said HUD Assistant Secretary for Congressional Relations and intergovernmental relations, Len Wolfson, in a letter to Rep. Pete Aguilar, D-Calif. “As a result, since DACA does not confer legal status, DACA recipients remain ineligible for FHA loans.”
Then in 2020, former HUD secretary Ben Carson returned these remarks, saying that no changes were made and that he would cooperate with an investigation to examine this rule. Following a HousingWire survey, several lenders reached out and said HUD officials told them that DACA recipients were no longer eligible for FHA mortgages.
Now, HUD officially supports DACA mortgages once again.
“To avoid confusion and provide the necessary clarity to HUD lending partners, the FHA waives the subsection of the FHA manual referenced above in its entirety,” HUD announced. “In a future update of the FHA manual, the language will be removed.”
Other FHA requirements remain in effect for all potential borrowers, including recipients of DACA status:
- The property will be the principal residence of the borrower
- The borrower has a valid social security number, except those employed by the World Bank, a foreign embassy or an equivalent employer identified by HUD
- The borrower is eligible to work in the United States as evidenced by the employment authorization document issued by USCIS
- The borrower meets the same requirements, terms and conditions as for
- American citizens