HUD Clarifies: DACA Recipients Aren’t Eligible for FHA Mortgages

June 14, 2019

Participants in the Deferred Action for Childhood Arrivals program are ineligible for mortgages from the Federal Housing Administration, a Housing and Urban Development official confirmed in a letter this week, ending recent uncertainty on the issue.

President Barack Obama had started the DACA program on June 15, 2012, during his presidency in a move to prevent the deportation of children of immigrants to the U.S. About 800,000 people are part of the program. The Trump administration has been trying to rescind the policy but has been blocked by a federal judge from doing so.

In recent weeks, confusion in the mortgage community and in several media stories raised questions about whether immigration status was affecting the ability of some immigrants to get a mortgage. HUD Assistant Secretary Len Wolfson may have ended that confusion in a letter he wrote this week to Rep. Pete Aguilar, D-Calif., which was obtained by Politico. In the letter, Wolfson writes:

“Determination of citizenship and immigration status is not the responsibility of HUD, and the Department relies on other government agencies for this information. Accordingly, because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans.”

Wolfson’s letter continued:

“Since at least October 2003, FHA has maintained published policy that non-U.S. citizens without lawful residency ‘are not eligible for FHA-insured loans.’ This same policy was incorporated in the Single-Family Housing Handbook in September 2015—under the previous administration—and clearly states that ‘[n]on-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.’”

Some government officials, however, want DACA members to be able to access mortgages in the same way as U.S.-born residents. The House Financial Services Committee on Wednesday passed a bill—Homeownership for DREAMers Act—that guarantees DACA recipients have the right to obtain federally backed mortgages and not be denied based on their immigration status. The bill will now go to the House floor for approval, but political insiders have publicly said they believe it’s unlikely the bill will pass the Republican-held Senate or be signed into law by the president.