Dreamers have effectively been cut out of FHA mortgage program: report

HUD is giving mixed messages, lenders say

New York /
Mar.March 16, 2019 01:00 PM

Housing and Urban Development Secretary Ben Carson (Credit: Getty)

Are Dreamers eligible for government-backed mortgages?

Federal agencies are sending mixed messages about Deferred Action Childhood Arrivals recipients’ eligibility for Federal Housing Administration loans, HousingWire reported.

That’s created confusion and essentially cut off FHA lending to Dreamers.

Several lenders and mortgage industry players said the Department of Housing and Urban Development sent a statement saying DACA recipients, or Dreamers, can no longer get FHA loans. According to HousingWire, one lender shared a message that appears to be from HUD and notes that Dreamers do not meet FHA guidelines because DACA doesn’t grant legal residency in the U.S.

According to HUD, “non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.” But Dreamers were previously eligible under certain circumstances — such as when they were legally allowed to work in the U.S., as determined by the USCIS.

Another lender told HousingWire they contacted FHA directly and were told that Dreamers are not eligible for FHA mortgages. And still another lender said the FHA’s customer service team said, in response to an inquiry, “NO we do no(t) lend to DACA borrowers.”

Others have said they’ve gotten mixed messages from HUD, the report said. Not providing a direct answer means HUD is leaving mortgage providers to interpret how to approach the issue. The ambiguity is leading lenders to not write mortgages for DACA borrowers in case it gets denied by FHA.

HUD, FHA and the Department of Agriculture told HousingWire that they had not changed their policies regarding mortgages to DACA recipients.

One lender told HousingWire that only one investor is currently willing buy the mortgages, but only if they are conventional loans backed by Fannie Mae or Freddie Mac. [HousingWire] — Meenal Vamburkar


Related Articles

arrow_forward_ios
PHE at 51 Jay Street and 4 Hunts Lane (Compass)
Dumbo penthouse leads Brooklyn’s luxury market
Dumbo penthouse leads Brooklyn’s luxury market
605 3rd Street and Casper's Luke Sherwin (Leslie Garfield, Getty)
Casper co-founder pays $500K over ask for Park Slope townhouse
Casper co-founder pays $500K over ask for Park Slope townhouse
Douglas Elliman CEO Dottie Herman on FOX
Elliman CEO: ‘People are afraid to walk in NYC’
Elliman CEO: ‘People are afraid to walk in NYC’
Village Preservation executive director Andrew Berman (iStock, Village Preservation)
Manhattan CB2 votes against Soho/Noho rezoning
Manhattan CB2 votes against Soho/Noho rezoning
Housing prices broke records for the third consecutive month in May, surging 16.6 percent over May 2020 (iStock)
Nowhere to go but up? Home prices smash another record in May
Nowhere to go but up? Home prices smash another record in May
34-20 Junction Blvd in Jackson Heights and Shorewood CEO S. Lawrence Davis (Google Maps, Shorewood)
Shorewood plans 227K-sq ft mixed-use project in Jackson Heights
Shorewood plans 227K-sq ft mixed-use project in Jackson Heights
Soho’s zoning madness, such as artists-only lofts and a ban on ground-floor retail, may finally change with a proposed rezoning.
The shopping district that banned retail: Soho’s incoherent zoning
The shopping district that banned retail: Soho’s incoherent zoning
Gov. Andrew Cuomo (Getty, iStock)
Cuomo vows to speed rent relief after pressure from Schumer
Cuomo vows to speed rent relief after pressure from Schumer
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...