Realizing the American Dream: FHA resumes backing “Dreamers”
“To be able to work, and build a better life is at the core of the American dream,” says Camilo Escalante, National Diverse Segments Director at Guaranteed Rate, about the news that HUD has instructed the FHA to resume backing mortgages for immigrants under the Deferred Action for Childhood Arrivals (DACA) program.
“That’s why they’re called ‘Dreamers,’” Escalante says, “With both conventional and FHA mortgage options, DACA participants now have the ability to build a better life. To be able to come out of the shadows and participate in this important sector of our economy is life changing.
“This is big.”
Providing clarity to DACA participants
On January 20th, before the inauguration of President Biden and as one of his last acts, former HUD secretary Ben Carson provided much needed clarity for “Dreamer” homebuyers. “Earlier today and prior to 12:00 p.m., Secretary Carson and I posted a waiver and other documents to the HUD website that makes clear DACA status recipients are now eligible to apply for mortgages insured by the Federal Housing Administration,” former HUD Deputy Secretary Brian Montgomery said.
Prior to this change, non-US citizens without established, lawful residency in the country weren’t eligible for FHA-backed loans. DACA participants were caught in a controversy because the term “lawful residency” pre-dated the creation of the DACA program and therefore didn’t anticipate the situation these “Dreamers” found themselves in. In 2019, HUD declared that the FHA wouldn’t back loans for DACA participants.
Opening up homeownership to qualified borrowers
As Guaranteed Rate’s Escalante points out, “’Dreamers are mostly college educated and hold steady jobs. A big portion are ready to purchase a home and begin to build wealth. Without affordable financing programs accessible to them, a significant portion of potential homebuyers have been denied access to credit. We’re talking about qualified borrowers that can repay their obligations and simply want to push forward with their homeownership dreams.”
The team at Guaranteed Rate is thrilled to offer FHA-backed loans to DACA participants and opening up the dream of homeownership to more and more people. It’s right in line with efforts we’re taking, says Escalante: “We have made significant efforts to better service the Hispanic community and bilingual customers, so offering FHA mortgages to DACA participants is in line with our efforts.”
Same requirements as any FHA backed loan
Homebuyers who are also DACA participants will need to meet the requirements that every other borrower of an FHA backed loan does:
- The property will be their principal residence
- Need a valid Social Security Number or Individual Taxpayer Identification Number, except for those employed by the World Bank, a foreign embassy or equivalent employer identified by HUD
- Eligible to work in the U.S., as evidenced by the Employment Authorization Document issued by the USCIS
- A solid employment history of salaried jobs
- The borrower satisfies the same requirements, terms and conditions as those for U.S. citizens
Believe in the power of homeownership
Escalante is excited about this new rule because Guaranteed Rate is honored to work with homeowners who believe in their dreams. “We’re dedicated to better servicing diverse communities. We understand how important it is for this deserving group to have access to purchase a home because we’re dreamers too!”
Borrowers must meet minimum lender requirements to be considered legally present in the United States in order to be eligible for financing. Additional or alternate documentation may be requested or permitted as individual borrower circumstances differ. Subsequent changes to the law and its application may impact eligibility for non-U.S. citizen borrowers. Guaranteed Rate, Inc. has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency. Not all applicants will be approved. Applicants subject to credit and underwriting approval. Contact Guaranteed Rate for more information and to discuss your individual circumstances. Restrictions Apply.