DACA Status Recipients Now Eligible for FHA Mortgage Loans

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The U.S. Department of Housing and Urban Development announced on January 20, 2021 that effective January 19, 2021 individuals who are classified under the “Deferred Action for Childhood Arrivals” program (DACA) with the U.S. Citizenship & Immigration Service (USCIS) and are legally permitted to work in the U.S. are eligible to apply for FHA mortgages.

The FHA mortgage loan eligibility for such individuals is based on HUD waiving the following provision in HUD Handbook 4000.1: “Non-US citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.” HUD advises that “The term “lawful residency” pre-dates DACA and thus did not anticipate a situation in which a borrower might not have entered the country legally, but nevertheless be considered lawfully present. To avoid confusion and provide needed clarity to HUD’s lending partners, FHA is waiving the above referenced FHA Handbook subsection in its entirety. In a subsequent update to the FHA Handbook the language will be removed.”

HUD also advises that other FHA requirements remain in effect for all potential borrowers, including DACA status recipients:

  • The property will be the borrower’s principal residence;
  • The borrower has a valid Social Security Number (SSN), except for those employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD;
  • The borrower is eligible to work in the U.S., as evidenced by the Employment Authorization Document issued by the USCIS; and
  • The borrower satisfies the same requirements, terms, and conditions as those for U.S. citizens.

The waiver of the HUD Handbook provision was signed by HUD Deputy Secretary Brian Montgomery, who was nominated to the position by President Trump.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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