Report: FHA Is Not Backing DACA Mortgages
A new investigation shows the Federal Housing Administration is not providing Deferred Action for Childhood Arrivals (DACA) recipients financing for home purchases. This is contrary to what Department of Housing and Urban Development officials said recently.
A new HousingWire investigation has uncovered lender bulletins or guidelines from a dozen different lenders each stating that Dreamers are not eligible for FHA financing. In most cases, the lenders do not list a reason for why Dreamers are ineligible for FHA financing, but two state housing finance agencies do provide a reason.
According to HousingWire, “The Connecticut Housing Finance [Authority], for example, recently published a lender bulletin that states: ‘FHA now stipulates that Non-Permanent Resident Alien Guidelines require lawful residence for FHA loans. Although (DACA) immigrants are in the United States legally, under the new administration they are not considered to have lawful residency.’” A similar notice was posted on the website of the Idaho Housing and Finance Association, HousingWire reports.
As the report states, without clear and definitive information from HUD and the FHA about whether they’re backing DACA mortgages, lenders are taking matters into their own hands so they’re not left without a buyer for the mortgages they originate. Without a buyer for the mortgage, they can’t originate another one. That’s how lenders make money. And investors aren’t going to buy a mortgage if they don’t think the FHA is backing it. That’s leading lenders to not originate FHA mortgages for Dreamers.