“DACA recipients remain ineligible for FHA loans” – HUD Official Len Wolson writes to California Democratic Rep. Pete Aguilar
What’s Happening: Uncertainty has reigned as mixed signals abound regarding eligibility of DACA recipients for mortgage insurance.
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, reports Housing Wire.
How we got here: In April, Secretary of Housing and Urban Development Ben Carson denied that young immigrants with Deferred Action for Childhood Arrivals status were being turned away for the loans while testifying at a congressional hearing.
He added that it would “surprise” him if DACA recipients were being turned down.
After Carson’s denials, more lenders were told by FHA help desks and HUD officials at conferences that they would not back loans for DACA recipients, Buzzfeed reports.
Where it stands: Legal issues and challenges surrounding mortgage loans to DACA recipients to which lenders must pay attention include (free subscrition: (free PDF deep dive)
- Determining such borrowers’ ability to repay pursuant to Regulation
- Ensuring compliance with the Civil Rights Act of 1866, which affords people of color the same rights as white citizens when entering into contracts
- Ensuring compliance with the Equal Credit Opportunity Act (“ECOA”), which allows lenders to consider immigration and residency status in extending credit
- Uncertainty how specific products and market strategies geared toward recent immigrants and limited-English proficiency speakers will be treated under fair lending laws, such as ECOA and the Fair Housing Act, along with statutes like the Fair Credit Reporting Act