Undocumented immigrants will soon no longer be eligible to apply for a popular federal home loan program as authorities are requiring applicants to have permanent residency in the U.S.
The Federal Housing Administration (FHA) loans are government-insured mortgages that have paved a way for lower-income people to buy a home, including those with the Deferred Action for Childhood Arrivals status.
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WATCH HEREBut as the U.S. Department of Housing and Urban Development will require permanent residency from applicants starting on March 25, undocumented people will have one fewer option.
The Department of Housing and Urban Development added that those with pending asylum and refugee status will also not be able to apply.
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SIGN UP "It’s the go-to program for anyone looking to buy a first home,” said real estate agent Jesus Laurean, explaining that FHA loans are often the best and only option for first-time buyers. “It definitely does impact people that are barely able to qualify for a home with a 3.5% FHA payment.”
The loans, which come with lower down payment requirements and sometimes lower interest rates, have been popular among undocumented immigrants, including DACA recipients who have called the U.S. home since they were brought into the U.S. by their parents without documentation.
“Anyone who does not hold a permanent residency is going to be the primary person affected by the new policy,” said Laurean.
Nancy Calco is one of the people whose dream of buying a home is seeing another roadblock due to the pending rules.
“Our dream has come to a standstill,” Calco said.
Although people like Calco could still seek conventional loan programs, that would require a higher credit score (at least 620) and a 20% down payment to avoid having to purchase private mortgage insurance. When the median price of home listed in LA County stood at $999,000 in February, a 20% down payment can be a tough swing.
Earlier this year, the Department of Housing and Urban Development said it’s working with the Department of Homeland Security to ban undocumented immigrants from public housing.
