The next wave of servicing regulation is coming – Are you ready?

Join this webinar to learn what servicers need to know about recent and upcoming servicing compliance regulations and strategies experts are implementing to prepare for servicing regulatory audits.

In a purchase market, rookie LOs may struggle

Rookie LOs in 2020 could ride the refi wave and rack up a hefty monthly paycheck without Herculean effort. But these days, they'll have to sing for their supper.

Logan Mohtashami on trends in forbearance exits

In this episode of HousingWire Daily, Logan Mohtashami discusses several hot topics in the housing market, including recent trends in forbearance exits and future homebuyer demand in the midst of inventory shortages.

Natural disasters and forbearance: What borrowers and mortgage servicers need to know

With a rise in natural disasters, including wildfires, hurricanes, floods, tornadoes and mudslides. The mortgage industry needs to be proactive in examining programs to help borrowers recover.

Politics & MoneyMortgage

HUD declares FHA once again backing DACA mortgages

Waives full FHA handbook subsection that had caused uncertainty about the matter

In one of former President Donald Trump administration’s last acts, the U.S. Department of Housing and Urban Development declared Wednesday that the Federal Housing Administration will once again back mortgages for immigrants under the Deferred Action for Childhood Arrivals (DACA) program.

HUD said DACA recipients who are legally permitted to work in the U.S. are eligible to apply for mortgages backed by the FHA.

“Earlier today and prior to 12:00 p.m., Secretary Carson and I posted a waiver and other documents to the HUD website that makes clear DACA status recipients are now eligible to apply for mortgages insured by the Federal Housing Administration,” former HUD Deputy Secretary Brian Montgomery said. “This notification marks the first time since DACA was established in 2012 that makes clear DACA status recipients are eligible to apply provided they meet other FHA requirements.”

Prior to today’s announcement, the FHA Single Family Housing Handbook included this statement: “Non-US citizens without lawful residency in the U.S. are not eligible for FHA-insured mortgages.” This language was incorporated into the FHA Handbook by the Obama Administration in September 2015 although it was first incorporated into FHA guidelines in 2003.

The problem, however, was that lawful residency pre-dated the creation of the DACA program, which created controversy on how the FHA should handle mortgages for DACA recipients. In 2019, HUD declared that the FHA would no longer back DACA mortgages after months of uncertainty.

“Determination of citizenship and immigration status is not the responsibility of HUD and the Department relies on other government agencies for this information,” then HUD Assistant Secretary for Congressional and Intergovernmental Relations Len Wolfson said in a letter to Rep. Pete Aguilar, D-Calif. “Accordingly, because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans.”

Then in 2020, former HUD Secretary Ben Carson walked back those remarks, saying no changes were made and that he would cooperate with an investigation to look into that rule. In the wake of a HousingWire investigation, several lenders reached out and said that they had been told by HUD representatives that DACA recipients were no longer eligible for FHA mortgages.

Now, HUD is officially backing DACA mortgages once again.

“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 will be the borrower’s principal residence
  • The borrower has a valid Social Security Number, except for those employed by the World Bank, a foreign embassy or equivalent employer identified by HUD
  • The borrower is eligible to work in the U.S., as evidenced by the Employment Authorization Document issued by the USCIS
  • The borrower satisfies the same requirements, terms and conditions as those for
  • U.S. citizens

Comments

  1. Great article, Kelsey! This is years of coverage and conversations converging for progress.

Load More Comments

Leave a comment

Most Popular Articles

These are the hottest housing markets in America

A housing market report from RE/MAX found that 36 of 51 metro areas had double-digit year over year sale price increases in August. Boise led the way.

Sep 17, 2021 By

Latest Articles

Fannie Mae to restart credit risk transfers

Fannie Mae announced that it will restart its credit risk transfer program by the fourth quarter of 2021, following proposed changes to its capital rule

Sep 21, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please