Is the Department of Housing and Urban Development quietly denying mortgage insurance to Deferred Action for Childhood Arrivals recipients?
Unofficially? Yes. And Prakash interviews several mortgage lenders who agree with this statement.
“There has been no official policy change from the Department of Housing and Urban Development, which oversees the FHA. Lenders say FHA and HUD officials are not putting in writing their recent advice not to issue FHA-backed loans to DACA recipients. But at conferences and on hotline calls, lenders are now being told not to approve FHA-backed loans for homebuyers who are on DACA.”
Hernandez first wrote a HousingWire blog post in September about the apparent contradiction between what the FHA and HUD are telling lenders verbally and the rules written in their handbook.
Hernandez since followed up with another piece that continues to stress the legality for providing federally backed mortgages to DACA recipients.
“Overwhelmingly, the main argument I have received as to why DACA borrowers are not eligible for mortgage financing is because FHA and Fannie Mae guidelines state that a U.S. citizen borrower must be legally present in the United States,” Hernandez writes.
“Critics argue that because DACA does not confer a Lawful Permanent Residence Status according to the USCIS, this means that DACA borrowers are not eligible for mortgage financing. Fortunately for Dreamers, this interpretation is wrong.”