Housing Wire: HUD declares FHA is no longer backing DACA mortgages

Housing Wire, June 13, 2019: HUD declares FHA is no longer backing DACA mortgages

After months and months of uncertainty about whether the Federal Housing Administration is backing mortgages for Deferred Action for Childhood Arrivals recipients or not, the Department of Housing and Urban Development has finally given an official answer. And that answer is no.

In a letter sent this week to Rep. Pete Aguilar, D-CA, HUD Assistant Secretary for Congressional and Intergovernmental Relations Len Wolfson stated definitively that Dreamers are not eligible for FHA mortgages. “Determination of citizenship and immigration status is not the responsibility of HUD and the Department relies on other government agencies for this information,” Wolfson said in the letter to Aguilar (which was reported first by Buzzfeed). “Accordingly, because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans,” Wolfson said. That declaration is a reversal from HUD’s previous answers to questions about whether FHA is backing mortgages for Dreamers.

On Wednesday, the House Financial Services Committee approved the “Homeownership for DREAMers Act,” which would clarify that Deferred Action for DACA recipients cannot be denied mortgages backed by FHA, Fannie Mae, Freddie Mac or the Department of Agriculture based solely on the basis of their DACA status.

The bill was introduced by Rep. Juan Vargas, D-CA, and passed out of committee by a vote of 33 to 25. That bill will now move to the House floor. If passed, that would undo the now-standing FHA policy, but passage in the Senate and approval from the White House would likely be a long shot.

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