HUD Reviewing FHA Loan Eligibility for DACA Recipients and Documentation Requirements for Certain Other Non-Permanent Residents | Ballard Spar LLP



The U.S. Department of Housing and Urban Development (HUD) recently considered eligibility for FHA mortgage loans for recipients of Deferred Birth Action (DACA) Letter to the mortgagee 2021-12… Like before reportedAt the end of the Trump administration’s announcement, HUD announced that, effective January 19, 2021, individuals assigned to DACA by the United States Citizenship and Immigration Services (USCIS) and legally permitted to work in the United States will be eligible to apply for an FHA mortgage.

In the mortgage letter, HUD refers to the FHA’s requirement that individuals without legal residence in the United States are not eligible for FHA-insured mortgage financing. HUD explains that “[t]its requirement has been incorporated into the policy, but the FHA recognizes that this is not terminology with clear, consistent meaning. ” After briefly reviewing the history and scope of the DACA, HUD then states, “FHA’s ‘legal residency’ requirements preceded the establishment of the DACA, and thus the FHA did not anticipate a scenario in which a potential borrower could obtain permission from DHS to attend during the grace period. and the right to a work permit. Because of this confusion, as announced in FHA INFO # 21-04 under the previous administration, the FHA has deprecated Directory 4000.1, Section II.A.1.b.ii (A) (9) (c) to provide further clarity in relation to eligibility for FHA-insured mortgage financing for DACA recipients for approval on or after January 19, 2021. “

HUD is also reviewing documentary requirements for work permits for citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, as well as those with an H-1B nonimmigrant status and retaining H-1B status. Specifically, the documentation requirements for non-permanent residents in HUD Handbook 4000.1 have been revised to include:

“[T]The borrower is eligible to work in the United States provided that the borrower provides:

  • Work Permit Document (USCIS Form I-766) showing that the status of the work permit is current;
  • USCIS Form I-94 certifying H-1B status and proof of employment with an authorized H-1B employer for at least one year;
  • certificate of granting them refugee or asylum status from USCIS; or
  • Certificate of Citizenship of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau. “


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