HUD Cracks Down on Government-Backed Mortgage Eligibility for Illegal Immigrants to Prioritize American Citizens and Taxpayers

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HOLLYWOOD, FLORIDA - OCTOBER 27: A 'For Sale' sign is posted in front of a single family home on October 27, 2022 in Hollywood, Florida. The rate on the average 30-year fixed mortgage hit 7.08%, up from 6.94% the week prior, according to Freddie Mac. Mortgage rates surpassed 7% for the first time since April 2002. (Photo by Joe Raedle/Getty Images)

The U.S. Department of Housing and Urban Development (HUD) has announced that non-permanent residents will no longer qualify for Federal Housing Administration (FHA) mortgages. The decision, set to take effect on May 25, is part of a broader initiative to prioritize American citizens in taxpayer-funded housing programs amid a significant rise in illegal immigration under former President Joe Biden’s administration, National Review has learned..

FHA loans are government-backed mortgages designed to help lower-income individuals achieve homeownership. While current U.S. law already prohibits illegal immigrants from receiving FHA-backed loans, HUD’s latest policy aims to bolster enforcement and prevent potential misuse of the program. However, the extent to which illegal immigrants have previously obtained FHA-backed loans remains unclear.

“FHA does not collect citizenship or residency data from loan applications and, as a result, does not track the number of non-permanent residents who have received FHA-insured loans under previous policies,” said General Deputy Assistant Secretary for Housing Jeffrey D. Little in a March 26 mortgagee letter shared with National Review. “This update aligns FHA’s mortgage insurance programs with the administration’s priorities while maintaining the agency’s mission to facilitate homeownership.”

Under the revised policy, FHA-backed mortgages will no longer be available to non-permanent residents, including Deferred Action for Childhood Arrivals (DACA) recipients and individuals awaiting asylum or refugee status decisions. HUD asserts that these groups face uncertainty regarding their ability to renew residency status, which raises concerns about long-term financial commitments and stable employment.

The policy change effectively removes the “non-permanent resident” category from FHA’s Single Family Title I and Title II programs, reversing a Biden-era decision that allowed DACA recipients with a valid Social Security Number and work authorization to access FHA loans.

HUD Secretary Scott Turner emphasized that this decision aligns with President Donald Trump’s immigration policies and will be reflected in an upcoming update to HUD’s Single Family Housing Policy Handbook 4000.1. Furthermore, HUD and the Department of Homeland Security recently announced a joint initiative to strengthen efforts against unauthorized access to taxpayer-funded public housing.

“There will be no more illegal immigrants receiving HUD-backed home loans,” Turner stated to National Review. “The Biden administration misused taxpayer resources and manipulated FHA policy to enable illegal immigrants to benefit from public funds when purchasing homes. This is unfair to those who follow the rules and work hard to become homeowners. HUD remains committed to implementing President Trump’s directive to end taxpayer-funded benefits for illegal immigrants and protect the American Dream of homeownership.”

During the 2024 presidential campaign, Trump vowed to prevent illegal immigrants from obtaining home mortgages if re-elected. Although illegal immigrants remain ineligible for FHA-backed loans under existing law, they may still access alternative mortgage options under the USA Patriot Act of 2001. This act permits banks to verify residency through an Individual Taxpayer Identification Number (ITIN) rather than a Social Security Number (SSN), providing a pathway for some non-citizens to secure home loans.

While comprehensive data on ITIN-based home loans remains limited, the Urban Institute, a Washington, D.C.-based research organization, estimated that between 5,000 and 6,000 home loans were granted to ITIN holders in 2023. Many illegal immigrants rely on ITINs for tax filing due to their lack of SSNs.

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