WASHINGTON — The Department of Housing and Urban Development has issued an opinion that borrowers in the Deferred Action for Childhood Arrivals program are ineligible for Federal Housing Administration loans.
The ruling, conveyed in a letter by HUD Assistant Secretary Len Wolfson, appeared to contradict recent comments by Secretary Ben Carson, who reportedly told lawmakers at a House hearing, "I’m sure we have plenty of DACA recipients who have FHA-backed loans.”
Wolfson's letter, which was first reported and posted by BuzzFeed, said the Obama administration policy deferring deportation of those brought here illegally as children did not grant them FHA eligibility.
"Because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans,” Wolfson wrote in the June 11 letter to Rep. Pete Aguilar, D-Calif.
The Trump administration previously denied that DACA recipients were ineligible following reports by BuzzFeed and HousingWire last year that mortgage lenders were being told to reject applicants subject to the immigration policy for FHA loans.
But Wolfson's letter said ineligibility for DACA recipients is consistent with prior FHA policy denying applicants who lack legal residency. DACA provides temporary protection and work authorization for immigrants who were brought to the U.S. illegally before they were 16. However, the policy does not offer recipients a path to citizenship or permanent residency.
“Since at least October 2003, FHA has maintained published policy that non-U.S. citizens without lawful residency ‘are not eligible or FHA-insured loans,’” Wolfson wrote. “This policy predates the creation of DACA by at least nine years.”
Wolfson said HUD under Carson has not implemented any policy changes that would affect the ability of DACA recipients to receive FHA loans, but continued to say that HUD is not responsible for determining citizenship or immigration status, and “relies on other government agencies for this information.”
Wolfson cited a policy in HUD’s 2015 Single-Family Housing Handbook, which states that “non-U.S. citizens without lawful residency in the U.S. are not eligible for FHA-insured Mortgages.”
However, another section in the handbook outlines the requirements for nonpermanent resident aliens to obtain FHA loans, which some believe more accurately reflects the status of DACA recipients. For non-permanent resident aliens, a borrower is required only to have a valid Social Security number and an Employment Authorization Document, which DACA recipients can obtain.
