FHA Says Yes To DACA!

Certified Mortgage Advisor
NMLS 1701021
Published 
January 21, 2021

I do, DACA! - FHA

FHA finally said "yes" to DACA. So the way it used to work before is you had to use a conventional loan if you were under DACA status. And now FHA has finally confirmed after years of going back and forth on if it's allowed or not with FHA, they finally said yes.

What is DACA?

So for those of you unfamiliar with DACA, it's a Deferred Action for Childhood Arrivals. This is a residency status inside of the US.

Why DACA was not allowed before

So previously, HUD or Urban Housing Development said that DACA did not meet the guidelines for lawful residency. And the reason why is those HUD rules and the FHA rules predated the DACA program. So that's why they didn't anticipate a program like DACA happening. Then they were incredibly unclear for years about if this program was going to be allowed.

January 19, 2021

So FHA eventually said we don't allow DACA. And then finally they reversed that decision on January 19th, 2021, and said, we will allow DACA to work with FHA.

Requirements

So there's a couple of stipulations here. Number one has to be a primary residence. Every FHA loan does, you need to have a valid Social Security Number (SSN). Also, you need to be eligible to work in the US as evidenced by an employment authorization document. Then there are the same requirements as those for US citizens. So, across the playing field, it's all the same requirements.

Same DTI & Credit Score

So same debt-to-income ratio, same loans limits, same credit score requirements all the way down to 500. If you're doing 10% down and then 580 and above, if you're doing 3.5% down. So, all of the same requirements here, same debt-to-income ratio, all the exact same.

This can be with any lender

Then this works with any lender to this is a core FHA change, not a lender by lender change. So you should be able to apply with any lender and use your DACA status to apply for an FHA loan as long as you meet the requirements.

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