Recently, the Department of Housing and Urban Development (HUD) under the Trump Administration has been directing lenders to deny Deferred Action for Childhood Arrivals (DACA) recipients government-insured home loans. While an official policy has not been issued, lenders and borrowers have reported that Federal Housing Administration (FHA) and HUD officials verbally tell lenders to deny DACA recipients FHA loans.
There has been no official policy change from HUD, causing lenders to rely on verbal guidance changes instead of the rules outlined in the HUD handbook. The handbook requires an Employment Authorization Document (EAD) to be approved for FHA loans, which DACA recipients do have. However, HUD officials, via hotline calls and conferences, are now saying that the C-33 EAD DACA recipients are not valid for government-insured loans.
Jose Pepe Rincon, a loan officer in Chicago, said that “the conversations that we have had on the DACA borrowers just end at the phone call and they are not able to provide anything in email. There is nothing written, which is unusual from HUD. They’re usually pretty firm on what can be done and what can’t be done.”
Danielle Hernandez, a compliance officer in Chicago, refuses to follow the verbal guidance until it is in writing. She argued that “until [HUD] put it in writing they have to insure the loan… They refuse to say [in writing] ‘no we will not make loans to DACA borrowers,’ but they’re discouraging it. It’s like, you know, ‘you’re allowed to do this but we don’t want you to do this.”
The Mortgage Bankers’ Association wrote a letter to HUD, asking for clear guidance in writing as how to handle DACA recipients’ mortgage applications. HUD has yet to respond. Dan Fichtler, the associations’ director of housing finance policy, said that “there remains confusion among mortgage lenders regarding the eligibility of individuals with deferred immigration status for FHA insured loans. MBA has asked HUD to provide clarity on this matter to ensure that lenders are able to serve all eligible borrowers while operating with greater certainty.”
While the confusion persists, Dreamers are unable to obtain necessary loans to purchase homes. Edith Aguirre Vazquez, a DACA recipient, was recently denied a FHA loan because of the unofficial guidance from the Trump Administration. “I had already sent all the paperwork that I needed, we had just done the house inspection,” Aguirre said. “I had been here since I was 3 years old. I feel as American as anybody else and I’m kind of getting doors shut, getting blamed for something that you had no choice of,” she added. The house Aguirre thought she was purchasing, she has since lost. She now must find a house she can buy directly without lenders or a FHA loan.
Although the courts have blocked Trump’s attempts to end DACA, many see this as an attempt to remove benefits that DACA recipients receive. Diego Corzo, a realtor in Austin, Texas and a DACA recipient, said that in his “eyes they’re doing this to restrict what the DREAMers can do.”
Immigrant rights activists say that DACA has improved the lives of thousands of immigrants. Approximately 800,000 undocumented immigrants, who are commonly referred to as “Dreamers,” have been issued worked visas, received a college education or deferred deportation because of DACA, allowing them to stay independently and safely within their communities.
Media Resources: Buzzfeed News 12/14/18; Feminist Newswire 11/9/18