September 28, 2021

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HUD Addresses FHA Loan Eligibility Of DACA Recipients And Documentation Requirements For Certain Other Non-Permanent Residents – Finance and Banking

United States:

HUD deals with FHA loan eligibility of DACA recipients and documentation requirements for certain other non-permanent residents

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The US Department of Housing and Urban Development (HUD) recently looked into FHA mortgage loan eligibility for Deferred Action for Childhood Arrival (DACA) recipients Mortgage letter 2021-12. As before reportedAt the end of the Trump administration, HUD announced that starting January 19, 2021, individuals classified under DACA with the US Citizenship & Immigration Service (USCIS) and legally eligible to work in the US will be eligible for FHA mortgages to apply.

In the mortgage letter, HUD addresses the FHA requirement that non-residents of the United States are not eligible for FHA-insured mortgage finance. HUD explains that “[t]its requirement was included in the policy, but the FHA recognizes that it was not terminology that had a clear, consistent meaning. “After briefly discussing the history and scope of DACA, the HUD then states:” The FHA’s “legal residence” requirements date prior to the establishment of DACA and therefore FHA did not anticipate the scenario in which a prospective borrower may be authorized by DHS to be present during the period of the deferred action and for a permit to work in Question to come. Because of this confusion, as announced in FHA INFO # 21-04 under the previous administration, the FHA completely omitted Manual 4000.1 Section II.A.1.b.ii (A) (9) (c) in order to provide more clarity regarding FHA-insured mortgage funding eligibility for DACA recipients for endorsements on or after January 19, 2021. “

HUD also addresses work permit documentation requirements for citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, as well as those with H-1B nonimmigrant classification and maintaining H-1B status. In particular, the documentation requirements for non-permanent residents in HUD Manual 4000.1 have been revised as follows:

“[T]The borrower is eligible to work in the United States provided the borrower provides:

  • a work permit document (USCIS Form I-766) showing that the work permit status is up-to-date;
  • a USCIS Form I-94 proving H-1B status and proof of employment by the authorized H-1B employer for at least one year;
  • Proof of USCIS granting refugee or asylum status; or
  • Proof of citizenship of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau. “

The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.

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