Jan 17, 2019 19-03

FHA’s Non-Permanent Resident Alien Guidelines and DACA

Idaho Housing and Finance Association have informed us that they have seen an increase in the number of loan submittals involving a Deferred Action for Childhood Arrivals (DACA) borrower.

If you are not already aware, FHA now stipulates that Non-Permanent Resident Alien Guidelines requires lawful residence for bowers using FHA loans. Although DACA immigrants are in the United States legally, under the new administration they are not considered to have lawful residency. See the information below:

HUD 4155. 1 4.A.3.e Non-Lawful Residency states "Non-US Citizens who do not have lawful residency in the U.S. are not eligible for FHA-insured mortgages."

U.S. Citizenship and Immigration Services stated in a letter dated Feb. 14, 2018:  "…deferred action under DACA does not confer legal status upon an individual and may be terminated at any time, with or without a Notice of Intent to terminate, at DHS's discretion."

Effective immediately, MFA will no longer allow loan reservations for DACA borrowers. MFA has also directed Idaho Housing not to purchase loans for DACA borrowers, as they currently do not meet FHA’s requirements. Loans currently in MFA’s system with borrowers who do not have lawful residency (locked or already closed) and not yet purchased by Idaho Housing will require the following documentation be uploaded to Lender Connection:

  1. Underwriter acknowledgement that the loan was approved with the knowledge that the borrower is a DACA borrower.
  2. Indemnification letter from the lender indemnifying MFA of any and all losses directly attributed to the loan being approved and closed with a DACA borrower.

Questions regarding conventional loans should be directed to your Fannie Mae representative for current requirements regarding DACA borrowers.

Thank you for participating in MFA’s program. Should you have any questions, please contact a MFA homeownership representative.