The Trump administration is reportedly denying Federal Housing Loans to Deferred Action for Childhood Arrivals (DACA) recipients, according to an article from BuzzFeed News on Friday.
Federal Housing Authority (FHA) loans are designed to help people with lower incomes purchase their own home. They typically come with a lower down payment. They are insured by the government through the Department of Housing and Urban Development (HUD).
In the past, people working with DACA recipients have been able to help them obtain an FHA loan. However, BuzzFeed reports that this is changing. Despite there being no policy to stop DACA recipients from receiving the loans, lenders told the news site that they’re getting guidance from officials to deny loans to them.
Edith Aguirre Vazquez is one of many FHA applicants to be denied. She received the call two days before Thanksgiving after saving for two years to buy a home. Aguirre told BuzzFeed, “I had already sent all the paperwork that I needed; we had just done the house inspection.”
But a call from her lender erased her dream to own a home. Aguirre added, “I’ve 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.”
The change in guidance began about a year ago. President Donald Trump attempted to get rid of the DACA program, which protects people who are illegally brought to the U.S. when they were children. Immigrants in the program can’t be deported. Trump’s attempt to get rid of DACA was struck down by courts.
However, that hasn’t stopped the Trump administration from making it more difficult for DACA recipients to live a normal life. DACA recipients and mortgage lenders told BuzzFeed that the administration is actively working to deny DREAMers FHA loans.
Edith Aguirre Vazquez was working with a lender at USA Mortgage. The lender told BuzzFeed, “It wasn’t USA Mortgage decision, it’s HUD decision that FHA loans can no longer be made to DACA. We are following HUD rules.”
Another loan officer noted the policy change. Jose Pepe Rincon had 42 FHA-backed loans approved for DACA recipients recently. But he was told in May that they would no longer be approved. FHA hotline workers have told him four times in recent months that the agency will no longer give out loans to DREAMers, even if they qualify for one.
However, Rincon hasn’t been able to get the guidance in writing. He noted, “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.”
DACA recipients aren’t mentioned specifically in HUD’s guidelines for FHA loans. However, it says that an Employment Authorization Document (which DACA recipients have) is required. At least over the phone, FHA and HUD officials have told lenders the specific EAD held by DACA recipients is no longer valid for loans backed by the government.
Newcastle Home Loans compliance officer and underwriter Danielle Hernandez told BuzzFeed that, “until they put it in writing they have to insure the loan.” At least one lender pointed to Gisele Roget, HUD’s deputy assistant secretary for single-family housing for telling them about DACA recipient denials.
The Mortgage Bankers Association sent HUD a letter recently asking for clarification. Until they receive a response, some realtors and loan officers are telling DACA recipients to consider conventional loans. Meanwhile, Aguirre already lost the home she and her husband were hoping to buy.