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  • Writer's pictureClare R. Okyere

DACA Recipients Now Eligible for FHA Loans

HUD announced that as of January 19, 2021 DACA recipients are able to apply for for home loans through FHA.

What Exactly Was the DACA Announcement?

On January 20, 2021 The U.S. Department of Housing and Urban Development (commonly referred to as HUD) made a major announcement regarding the Deferred Action for Childhood Arrivals or DACA: They stated individuals classified in the DACA program who are legally allowed to work in the United States are now eligible to apply for an FHA mortgage. Previously, these individuals were limited to conventional loan options.

HUD waived the prior provision that prohibited DACA recipients from being eligible to receive a home loan through FHA. HUD stated the prior provision was outdated and created prior to the creation of the DACA program. According to the HUD statement, "The term 'lawful residency' pre-dates DACA and thus did not anticipate a situation in which a borrower might not have entered the country legally, but nevertheless be considered lawfully present."

What are the Implications of this Announcement?

HUD's announcement gives DACA recipients more flexibility and greater options in their journey toward homeownership. FHA loans are government backed and typically require lower down payments than a conventional loan. In addition, FHA loans have lower credit score requirements. A qualified individual with credit scores starting at 580 may be approved for an FHA loan. However, an individual typically needs a score of 640 or higher to be approved for a conventional loan. Thus, the announcement potentially made home ownership attainable to individuals who were not able to qualify for a conventional loan.


If you have questions about this announcement or anything else loan related, we are here to help. Call today to chat. No fees. No obligation. Just information to help you plan your next steps.

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This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

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