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Mortgage

Under fire, Carson says HUD will allow DACA recipients to get FHA mortgages

Freedom of Information Act request shows HUD changed policy to deny `Dreamers’

Ben Carson, secretary of the Department of Housing and Urban Development, told Congress on Tuesday that he supported Deferred Action for Childhood Arrival recipients being eligible for mortgages backed by the Federal Housing Administration.

Carson initially denied in his testimony that DACA recipients had been banned from getting FHA loans after President Donald Trump was sworn into office in 2017, then backpedaled.

“Do people have conversations? Yes they do,” Carson said. “And I’m sure they will continue to have those conversations. Am I privy to all their conversations? No. Do their conversations change the policies? Absolutely not,” he said.

“The whole thing started as the result of a question that was asked about it, and it then came to light that maybe some rules were being violated and people decided that they better pay closer attention to the rules,” Carson told Congress.

Carson’s comments on so-called Dreamers, as DACA recipients are known, came four days after HUD records and internal communications released as part of a Freedom of Information Act confirmed HUD changed its policy to deny FHA loans for DACA recipients even as top officials told Congress the opposite.

Carson’s response also comes a year after an underling, HUD Assistant Secretary for Congressional and Intergovernmental Relations Len Wolfson, sent a letter to Rep. Pete Aguilar (D-CA) stating Dreamers were not eligible for FHA mortgages.

On Monday, over three dozen members of the Senate and House of Representatives sent a letter to the HUD Office of Inspector General asking for an investigation. The letter charged that top HUD officials “knowingly misrepresented to Congress the implementation and enforcement of this new policy.”

At the end of Tuesday’s two-hour oversight hearing focused on housing regulators, Sen. Robert Menendez (D-NJ), who signed the letter, asked for extra time to return to the DACA issue.

“HUD made a choice to exclude DACA recipients from FHA loans by defining lawful residency in a different way, in a manner to exclude them, which is made clear in the FOIA documents,” Menendez said. “So HUD did change the rules because before a DACA recipient not only was eligible but also received an FHA mortgage if they were a responsible borrower and now they cannot.”

Menendez then asked Carson if he would “fully cooperate” with an investigation.

Carson responded: “Not only will we cooperate with the investigation, but I would be delighted to work with you on looking at that rule.”

The senator accepted his offer.

“I would accept that offer and hopefully look to return to what your department used to do,” Menendez said. “And if someone changed it underneath you, somebody at a lower range, and that’s not your view, then I would embrace you changing back to what it was.”

In the wake of a HousingWire investigation last year, several lenders reached out and said that they’ve been told by HUD representatives that DACA recipients were no longer eligible for FHA mortgages.

In addition, HousingWire uncovered lender bulletins or guidelines from a dozen different lenders each stating that Dreamers are not eligible for FHA financing.

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