HUD Announces: DACA Recipients Eligible for FHA Loans
On the morning of January 20, 2021, the Department of Housing and Urban Development (HUD) announced that it will allow individuals classified under the Deferred Action for Childhood Arrivals (DACA) program to apply for FHA mortgages.
The announcement states that “non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages,” which, in simpler terms, means that non-U.S. citizens not sponsored by DACA cannot apply for FHA mortgages.
However, the concept of ‘lawful residency’ predates DACA. HUD did not account for individuals who entered the country illegally but are still lawfully present. “To avoid confusion and provide needed clarity to HUD’s lending partners, FHA is waiving the referenced FHA Handbook subsection in its entirety. In a subsequent update to the FHA Handbook the language will be removed,” HUD says. This hints at a hopeful future where immigrants can more easily apply for mortgages.
The following FHA requirements will remain in place for all borrowers including DACA status recipients:
- the property will be the borrower’s primary residence;
- the borrower must have a valid Social Security Number (SSN), unless employed by the World Bank, a foreign embassy, or employer of equivalence acknowledged by HUD;
- the borrower must be eligible to work in the U.S., and;
- the borrower meets the terms and conditions for a U.S. citizen.
Employment Authorization Document is required to substantiate work status. If the Employment Authorization Document will expire within one year and a prior history of residency status renewals exists, the lender may assume that continuation will be granted. If there are no prior renewals, the lender must determine the likelihood of renewal based on information from the USCIS.
A borrower residing in the U.S. by virtue of refugee or asylee status granted by the USCIS is automatically eligible to work in this country. The Employment Authorization Document is not required, but documentation substantiating the refugee or asylee status must be obtained.
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