At dawn ahead of Memorial Day weekend, the US Department of Housing and Urban Development demanded that US mortgage lenders FHA lower the underwriting bar for H-1B visa holders.
To qualify for a FHA loan, these temporary foreign workers in specialized trades must have at least one year of work experience in the United States.
But if you are a US citizen or permanent US resident (green card holder), the two-year minimum still applies.
I think that in a difficult battle for home ownership, citizens and legal residents will be put in the foreground, in the center and, of course, in the first place. This new policy is not. This could result in citizens and permanent residents being trapped in the back of the bus.
This provides a clear advantage for foreign workers as they gain an advantage over US citizens and permanent US residents with short or patchy employment history. And this will create more competition when buying a home.
According to the U.S. Department of Homeland Security, as of September 30, 2019, the latest available data put the number of people permitted to work on an H-1B visa at 583,420.
Why is HUD offering H1-B visa holders an easier route to home ownership at the expense of permanent residents?
A HUD spokesman said this action is in line with the Biden administration and HUD’s strategy to “expand access to affordable mortgages for all low- and middle-income individuals and families, especially in underserved communities.”
To say that H-1B visa holders are underserved sounds empty. In my decades of getting mortgages, I have never received a loan application from an H-1B visa holder who was not a high-level, high-level employee, such as an engineer or software developer.
FHA funding continues to go a long way in getting people on the path to home ownership. According to Attom Data Solutions, national lenders have issued an average of 1.1 million FHA mortgages per year over the past five years, with 125,000 California borrowers receiving FHA funding per year.
FHA funding was used in nearly 10% of all Los Angeles County purchases, 5.7% in Orange County, over 20% in Riverside County, and nearly 21.5% in San Bernardino County.
“It doesn’t make any sense,” said Dave Stevens, Commissioner for the US Federal Health Agency under President Obama. “If I were a commissioner, I would change the policy to be consistent or better” for citizens and green card holders.
Stevens also inquired if HUD conducted a default risk analysis.
“There is a risk that taxpayers support mortgage programs for workers who could theoretically lose their jobs and be expelled from the country,” Stevens said.
One industry executive told me on condition of anonymity that the HUD is in disarray as many of the vacancies left by outgoing Trump administration officials have yet to be filled.
“The social just warriors have taken over and are trying to catch up,” he said.
Another point of view comes from outside the industry.
“Is there a rational distinction between groups? Is there a labor shortage? It is not unfair or discriminatory as long as there is a rational, legitimate public purpose, ”said Michael Josephson, founder, CEO and president of the Josephson Institute of Ethics. “However, they must be transparent in this matter. Everything the government does should be subject to public responsibility. “
I wonder if this is simply a public policy error that will be quickly corrected. Or is it the beginning of a slippery slope in housing policy, in which more uneven policies become the rule of law?
Freddie Mac appreciated the news: IN 30 year flat rate 2.99% on average, 4 basis points higher than last week. The 15-year fixed rate averaged 2.27%, unchanged from last week.
The Mortgage Bankers Association reported a 4% decrease in mortgage applications from the previous week.
Bottom line: Assuming that the borrower receives an average 30-year fixed rate on the corresponding loan of $ 548,250, the payment last year was $ 57 more than this week’s $ 2308.
What I see: Locally, highly qualified borrowers can obtain the following fixed rate mortgage loans with a cost of 1 point: 30-year FHA at 2.25%, 15-year conditional at 1.99%, 30-year conditional at 2.625%, 15-year a notional high balance ($ 548,251 to $ 822,375) at 2.125%, a 30-year traditional high balance at 2.875% and a 30-year fixed large balance at 2.875%.
Eye-catching Credit of the Week: 20-year fixed at 2.75% excluding points.
Jeff Lazerson is a mortgage broker. He can be reached at 949-334-2424 or email@example.com. His site www.mortgagegrader.com…