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Starting from May 25, 2025, the United States government will implement new immigration restrictions that will drastically change who can access the popular mortgage loans insured by the Federal Housing Administration (FHA).
This measure, announced this week by the Department of Housing and Urban Development (HUD), will allow loans to be accessible only to U.S. citizens and legal permanent residents.
The restriction excludes thousands of immigrants with temporary status, including those who are undergoing immigration processes or using the ITIN tax identification number to file taxes.
A shift in housing policy: From inclusive access to migratory exclusion
Since its creation in 1934, the FHA has been a key tool in facilitating access to housing in the United States, especially for individuals with low incomes, imperfect credit histories, or insufficient funds for a down payment exceeding 20%.
FHA loans are widely used by first-time buyers due to benefits such as low down payments and more flexible approval criteria.
However, with this new directive, the Donald Trump administration is ending a more inclusive policy that was adopted during Joe Biden's term, which allowed immigrants with non-permanent immigration status, such as DACA recipients, to access loans backed by the federal government.
The change was formalized on Wednesday, March 26, through a memorandum signed by the Assistant Secretary-General for Housing, Jeffrey D. Little, who justified the measure based on the administration's economic priorities.
"This update ensures that the FHA's mortgage insurance programs are managed in accordance with the Administration's priorities, while also fulfilling its mission to facilitate access to homeownership," he noted in statements reported by the local press.
From now on, all applicants must demonstrate their legal permanent resident status through official documentation issued by the U.S. Citizenship and Immigration Services (USCIS).
Lending institutions will be required to verify this information as part of the approval process.
Who does this new regulation affect?
With the elimination of the category of “non-permanent resident” in the FHA’s Single Family Housing programs Title I and Title II, thousands of legal immigrants, who were previously eligible under certain conditions, will be excluded.
Among them are:
-Individuals with temporary work visas.
-International students with F or J visas.
-Applicants for political asylum and refugee status whose residency has not yet been approved.
-Beneficiaries of Deferred Action for Childhood Arrivals (DACA).
-Immigrants who file taxes with an ITIN and do not have a Social Security Number (SSN).
“Currently, non-permanent residents are subject to immigration laws that may affect their legal stay in the country,” Little warned in the memorandum.
"This uncertainty poses a challenge for the FHA, as the ability to meet long-term financial obligations depends on the stability of residency and employment," he added.
The government's argument: Protect the taxpayer and close "gaps."
The measure is part of a package of migration and economic policy actions initiated by Trump to prioritize access for U.S. citizens to programs funded with public money.
This was made clear by the HUD Secretary, Scott Turner, in statements to National Review.
“There will no longer be undocumented immigrants obtaining mortgage loans backed by HUD. The Biden administration exploited taxpayer resources and manipulated FHA policy to allow undocumented immigrants to take advantage of the American taxpayer by financing housing, he pointed out.”
“For those who follow the rules and work hard to buy a home, this is unacceptable. HUD will continue to implement President Trump’s executive order that ends taxpayer subsidies for border openings and protects the American dream of homeownership,” he added.
Although U.S. law explicitly prohibits undocumented immigrants from accessing FHA loans, HUD acknowledges that it did not have sufficiently effective mechanisms to verify the immigration status of applicants.
"The FHA does not retain data on citizenship or residency from the loan application and, therefore, does not keep information on the number of non-permanent residents who have received loans insured by the FHA under previous policies," explained Deputy Secretary Little.
As a complement, HUD recently signed a Memorandum of Understanding with the Department of Homeland Security (DHS) to strengthen inter-agency coordination and prevent undocumented immigrants from accessing public housing or benefits funded by federal dollars.
What happens to those who are already in the process of purchasing?
Despite the tightening of regulations, there is a legal loophole that could benefit those who have already started the buying process or plan to do so before May 25.
According to a source from the Department of Housing in Washington, cited by Telemundo Houston, those who obtain a "case number" with a date prior to the change may qualify under the current rules, even if the operation closes later.
"Anyone currently in the process of buying a home or considering it can obtain a case number dated today, which could ensure they receive the loan before the Trump administration's regulations take effect," the source stated.
"Those who do not have permanent residency status can take advantage of it for at least six more months," he added.
These case numbers issued by HUD are valid for six months, providing a crucial timeframe for thousands of buyers who can still start their application under the previous rules.
What makes FHA loans so attractive?
FHA loans have historically been a fundamental option for working families, immigrants, and first-time homebuyers. Among their main advantages are:
-More flexible credit scoring requirements.
-Possibility of paying very low rates, even below 3%.
-Eligibility even with a bankruptcy record or financial issues.
-Inclusion of closing costs within the loan.
With the enactment of the new regulation, many people who relied on these favorable conditions will have to seek more restrictive and costly financing options in the private market.
What alternatives exist for the excluded?
Although the FHA will no longer be available for non-permanent residents, there are alternative options, though they are more limited and expensive.
Since the approval of the Patriot Act in 2001, some banks have offered mortgages based on the ITIN as a substitute for the SSN.
A report from the Urban Institute, published in early 2024, estimated that between 5,000 and 6,000 mortgage loans were granted to ITIN holders in 2023, indicating that a part of the financial system remains accessible to this segment, although under less favorable conditions.
The impact of this measure will be particularly felt among Latino, Asian, and Caribbean communities, where many immigrants have not yet obtained permanent residency but actively contribute to the economy, pay taxes, and participate in the civic life of the country.
For many, the American dream of owning a home will now be more difficult to achieve.
Frequently Asked Questions About the New Mortgage Loan Restrictions for Immigrants in the U.S.
What are the new requirements to access FHA loans in the U.S.?
Starting from May 25, 2025, FHA-secured mortgage loans will be available only to U.S. citizens and legal permanent residents. This excludes immigrants with temporary status, such as those with temporary work visas or DACA beneficiaries.
What impact does this measure have on immigrants with temporary status?
The new regulation excludes thousands of immigrants with temporary statuses from accessing FHA loans. This affects individuals with temporary work visas, international students, asylum seekers, and DACA recipients, among others. These groups will need to seek more expensive financing alternatives in the private sector.
Why has the U.S. government implemented these restrictions?
The Trump administration justifies the measure as a way to protect taxpayers and close gaps in access to programs funded with public money. The aim is to prioritize access for American citizens to these benefits, arguing that previous policies allowed undocumented immigrants to take advantage of public resources.
What alternatives do immigrants excluded from FHA loans have?
The alternatives for immigrants excluded from FHA loans are limited and more expensive. Some banks offer mortgages based on the Individual Taxpayer Identification Number (ITIN), but these options typically have less favorable terms compared to FHA loans.
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