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DACA recipients eligible for FHA loans

Agency Rule-Making & Guidance FHA HUD DACA Mortgages

Agency Rule-Making & Guidance

On January 20, the Federal Housing Administration (FHA) announced that Deferred Action for Childhood Arrivals (DACA) recipients are now eligible for FHA loans. Specifically, FHA is waiving the FHA Single Family Housing Handbook statement: “Non-US citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.” As previously covered by InfoBytes, in June 2019, Len Wolfson, the Assistant Secretary for Congressional and Intergovernmental Relations at HUD sent a letter to Representative Pete Aguilar (D-CA) stating that DACA recipients are not eligible for FHA loans under FHA published policy, referring to the handbook statement. FHA is now reversing course, stating 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.” In order to avoid confusion, FHA is waiving the Handbook subsection containing the statement in its entirety, but emphasizes that all other FHA borrower requirements remain in effect for all potential borrowers, including DACA recipients.

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