Did You Know?

FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

FHALoan.com
Click to Start Your Refinance or Purchase Loan

FHA Loans for Dreamers

FHA Loans for Dreamers

There has been a lot of controversary surrounding the Deferred Action for Childhood Arrivals (DACA) program, and that extends to the matter of homebuying as well. Immigrants protected under DACA, known as “Dreamers,” were not able to access affordable homeownership opportunities offered the FHA without “lawful residency.” This changed in January, 2021. Secretary of HUD at the time, Dr. Ben Carson, issued a waiver on the HUD website, confirming that Dreamers would be eligible to apply for home loans backed by the FHA. 

A Hurdle for Dreamers 

Prior to the waiver from the Secretary of HUD, DACA participants were unable to apply for FHA loans because of the language in place. Mortgages backed by the FHA were only available to “lawful residents” of the U.S. The term was established before DACA was put in place, which is why it doesn’t cover Dreamer status. This is what lead to Dreamers being unable to apply for government-backed mortgages. In fact, it was made clear in 2019 that the FHA would not insure home loans made to DACA status recipients. 

Why This Matters 

The exclusion of Dreamers from government-insured home loans created a hurdle for many potential homeowners. Most Dreamers are college-educated and employed. Many of them have worked to secure the American Dream of homeownership. While they have the finances in place to apply for a mortgage, the system in place did not grant them access to credit, keeping many of them from accruing wealth through real estate investments and obtaining proper housing. 

With the new waiver in place, they have access to affordable FHA home loans designed for first-time homebuyers. 

The Same FHA Guidelines 

There is no discrepancy in the FHA’s eligibility requirements when it comes to DACA status holders applying for an FHA-backed mortgage. They must meet all the same criteria: 

The home being purchased must be used as the borrower’s primary residence, and not serve as an investment property. Borrowers require a Social Security Number or Tax Identification Number to apply, except for individuals employed by the World Bank, a foreign embassy, or similar employer identified by HUD. They must be deemed eligible to work in the U.S., with an Employment Authorization Document issued by the USCIS. While there is no income check, all FHA applicants must have an established employment history of salaried jobs 

In short, a Dreamer must satisfy the same guidelines, terms and conditions as those for U.S. citizens.

------------------------------

RELATED VIDEOS:
There's a Difference Between APR and Interest Rates
Choose Your Mortgage Lender Carefully
Getting Started With Your FHA Loan Application
See Your Credit Scores From All 3 Bureaus
See Your Credit Scores From All 3 Bureaus
GET YOUR SCORES NOW!

More FHA Loan Articles

Getting Approved for an FHA Loan

While an FHA home loan is a good option for first-time homebuyers who don’t have enough money saved for a large down payment, it’s important to understand the ins and outs of the FHA guidelines, and what it takes to get approved as a borrower. 

When Buying with an FHA Loan, Don't Skip the Home Inspection

This wait isn’t easy when you've been shopping for a new home. But getting a home inspection is a crucial step, and not one you should consider skipping. Make sure you hire a reliable home inspector, wait for your inspection report, and watch out for these red flags. 

Is it the Right Time for an FHA Refinance?

With historically low interest rates, the mortgage industry has seen a sharp uptick in refinances. Taking advantage of the current market might be in your best interest and could lower your monthly payment significantly. Don’t forget that refinancing a mortgage comes with closing costs.

Things to Know About Making an FHA Loan Down Payment

Many first-time homebuyers need some help understanding and navigating the ins and outs of the mortgage process, and down payments are an essential part of that. A down payment is an upfront installment made on a large purchase while the remainder is paid off with a loan.

Let's Compare FHA Loans to VA, USDA, and Conventional Mortgages

Buying and financing a home is complicated and can become overwhelming. It's important for you to stay informed, and know what your options are. So, start with the basics and read about the four different mortgage types available before approaching a lender.


-- Find More Articles in the FHALoan Library --

FHALoan.com is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither FHALoan.com nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

SecureRights Advertiser Contact Information