FHA Policy Update: DACA Recipients Now Eligible for Loans

On January 2021, the U.S. Department of Housing and Urban Development declared that the Federal Housing Administration will give DACA(Deferred Action for Childhood Arrivals) recipients with U.S. work permits access to loans it insures.

This means that any DACA recipients who are legally permitted to work in the U.S. are eligible to apply for mortgages backed by the FHA.

In 2019, HUD declared that ten FHA would no back DAVA mortgages after back and forth under un-clear language in the FHS Single Family Housing Handbook that stated: “Non-US citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.”

The recent guideline updates marks the first time since DACA was established in 2012, the new language provides a clear statement that DACA recipients are eligible to apply, provided they meet other standard FHA requirements.

“To avoid confusion and provide needed clarity to HUD’s lending partners, FHA is waiving the above referenced FHA Handbook subsection in its entirety,” HUD announced. “In a subsequent update to the FHA Handbook the language will be removed.”

Other FHA requirements remain in effect for all potential borrowers including DACA status recipients:

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