I'm making it easier for everyone to understand how the mortgage process works! As part of my brand new "Ask the Underwriter" feature, I'll be posting your questions and my answers each week. Want to see your question featured? Submit a question in the comments section of this post, tweet at us, or post on Reddit.
Overwhelmingly, the main argument I have received as to why DACA Borrowers are not eligible for mortgage financing is because FHA and Fannie Mae Guidelines state that a non–U.S. citizen borrower must be legally present in the United States. Critics argue that because DACA does not confer a Lawful Permanent Residence Status according to the USCIS, this means that DACA Borrowers are not eligible for mortgage financing. Fortunately for Dreamers, this interpretation is wrong.
First, let’s look at exactly what the USCIS Website says about this.
The USCIS issued updated DACA FAQs in 2018 but according to the USCIS, the Archived DACA FAQs still apply unless otherwise provided in the new guidance.
Here is that answer from the USCIS Website:
Q1: Do the archived USCIS DACA FAQs still apply?
A1: Yes, except as explained below. Unless otherwise provided in this guidance, the DACA policy will be operated on the terms in place before it was rescinded on Sept. 5, 2017, until further notice.
The only guidance on a lawful residence that the USCIS provided in the new DACA FAQs was Q68, which refers to Lawful Permanent Residence Status.
Q68: Does deferred action provide me with a path to permanent resident status or citizenship?
A68: No. A deferred action is a form of prosecutorial discretion that does not confer lawful permanent resident status or a path to citizenship. Only the Congress, acting through its legislative authority, can confer these rights.
So, DACA Recipients DO NOT have Lawful Permanent Residence! This means DACA Borrower’s are not eligible!... WRONG!
And this is where the majority of the mortgage world has gotten confused… They failed to realize that FHA and Fannie Mae DO NOT require a borrower to have Lawful Permanent Residence. The guidelines only state that the non–U.S. citizen borrower must be legally present in this country.
And guess what the USCIS has to say about whether or not DACA Recipients are to be considered lawfully present in the US… Nothing in the new DACA FAQs… so we defer to the Archived DACA FAQs, which are still in effect according to the new DACA FAQs. And wouldn't you know it, the very first question in the Archived DACA FAQs provides us with guidance on this subject:
Q1: What is deferred action?
A1: Deferred action is a discretionary determination to defer a removal action of an individual as an act of prosecutorial discretion. For purposes of future inadmissibility based upon unlawful presence, an individual whose case has been deferred is not considered to be unlawfully present during the period in which deferred action is in effect. An individual who has received deferred action is authorized by DHS to be present in the United States, and is therefore considered by DHS to be lawfully present during the period deferred action is in effect.
Final Answer: DACA BORROWERS ARE CONSIDERED TO BE LAWFULLY PRESENT IN THE UNITED STATES AND THEREFORE MEET FHA AND FANNIE MAE GUIDELINES FOR NON-US CITIZEN BORROWERS.
Mortgage lender - please make someone’s Christmas wish come true and start lending to Dreamers…Your Loan Officers will be grateful too! I know ours and our customers are!