Does FHA Allow DACA Borrowers?
Unlock FHA homeownership for DACA recipients. Understand the federal guidelines and necessary steps to secure your loan.
The Federal Housing Administration (FHA) offers mortgage insurance on loans made by FHA-approved lenders across the United States. These loans are designed to help make homeownership more accessible, particularly for borrowers who might not qualify for conventional mortgages. FHA loans often feature lower down payment requirements and more flexible credit guidelines. Understanding eligibility for these government-backed loans is important for various borrower types, including those under the Deferred Action for Childhood Arrivals (DACA) program.
Understanding FHA Loan Eligibility for DACA Recipients
Recent policy updates from the U.S. Department of Housing and Urban Development (HUD) have altered FHA loan eligibility for non-permanent residents, including Deferred Action for Childhood Arrivals (DACA) recipients. As of May 25, 2025, DACA recipients are generally no longer eligible for FHA-insured mortgages. This policy limits FHA mortgage eligibility to individuals who hold lawful permanent resident status in the U.S., U.S. citizenship, or citizenship from specific Freely Associated States. This updated policy reverses previous guidance from 2021 that had expanded FHA loan eligibility to DACA recipients who were legally permitted to work in the United States. The current administration has reaffirmed a commitment to reserving federal benefits, including FHA-insured mortgages, for those with permanent legal status.
Specific Documentation for DACA Borrowers
Under current FHA policy, documents previously used to establish eligibility for DACA recipients are no longer sufficient for FHA-insured loans. Previously, DACA borrowers provided a valid Employment Authorization Document (EAD) to verify their status and work authorization. The EAD typically included a category code identifying DACA status. Additionally, DACA borrowers needed a valid Social Security number (SSN) and had to demonstrate the property would be their principal residence. While these documents proved legal work authorization, the updated guidance now emphasizes lawful permanent residency. Therefore, even with a valid EAD and SSN, DACA recipients will not meet the revised FHA residency requirements for new loan applications.
Loan Application Process
The general process for applying for an FHA loan involves several steps, regardless of the applicant’s residency status.
Find an FHA-approved lender. FHA loans are originated by private lenders and insured by the government.
Proceed with pre-qualification or pre-approval. This provides an estimate of how much you might borrow and requires information about income, employment history, and credit.
Submit a formal loan application.
Undergo the underwriting process. The lender reviews documentation, financial records, and credit history to assess repayment ability.
Complete an FHA-approved appraisal. This ensures the property meets FHA standards and determines its market value.
Attend the loan closing. All necessary documents are signed, and funds are disbursed.