The Trump administration has admitted for the first time that young undocumented immigrants who were brought to the US as children are being turned down for federally backed housing loans, after Secretary of Housing and Urban Development Ben Carson denied it in congressional testimony earlier this year.



“Because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans,” Len Wolfson, a Department of Housing and Urban Development official, wrote in a letter to California Democratic Rep. Pete Aguilar on Tuesday.

The loans, insured by the Federal Housing Administration (which is part of HUD), are intended to make homeownership more accessible, with lower credit score and deposit requirements.

Carson denied that young immigrants with Deferred Action for Childhood Arrivals status were being turned away for the loans while testifying at a congressional hearing in April. BuzzFeed News first reported in December that HUD was quietly advising lenders to deny DACA recipients the government-insured loans.

“I asked around after I read that story,” Carson told members of Congress. “No one was aware of any changes that had been made to the policy whatsoever. I’m sure we have plenty of DACA recipients who have FHA-backed loans.”

He added that it would “surprise” him if DACA recipients were being turned down.

After Carson’s denials, more lenders were told by FHA help desks and HUD officials at conferences that they would not back loans for DACA recipients.

“The explanation we received from HUD is inconsistent with the realities on the ground and statements made by Secretary Carson to members of the Appropriations Committee, and it does nothing to clarify the confusion created by the agency’s inconsistent policies," Aguilar said in a statement to BuzzFeed News on Thursday.



"We know that DACA recipients have received these loans in the past, and it’s shameful that HUD is allowing the president’s anti-immigrant agenda to dictate housing policy,” he said.

BuzzFeed News’ initial reporting was based on interviews with people who lost out on the loans because of their immigration status, as well as loan officers, Realtors, and industry associations, which said they had never been told that DACA recipients were ineligible until the Trump administration and Carson took office.

“HUD has been very clear that it has not implemented any policy changes during the current Administration, either formal or informal, with respect to FHA eligibility requirements for DACA recipients. This letter confirms that fact,” Wolfson wrote in the letter, obtained by BuzzFeed News.

The FHA has never had an explicit policy about DACA recipients. The FHA’s single-family housing handbook, the set of rules the agency refers lenders to, says only that an Employment Authorization Document — which DACA recipients have — is necessary “to substantiate work status” for noncitizens and qualify for the housing loans.

Wolfson’s letter argues, “Since at least October 2003, FHA has maintained published policy that non-U.S. citizens without lawful residency ‘are not eligible for FHA-insured loans,’” and then goes on to say that when DACA was created in 2012, then–secretary of homeland security Janet Napolitano said the status “‘confers no substantive right, immigration status or pathway to citizenship.’”

Danielle Hernandez, an underwriter who wrote a blog post in September about the conflict between what lenders were being told and what is spelled out in the FHA handbook, maintains that HUD’s position does not make sense, given its own guidelines.

“FHA doesn’t require a citizenship or a lawful status; they just require them to be residing lawfully, and the [US Citizenship and Immigration Services] website says they are to be considered lawfully present while they are in deferment,” she said. “Citizenship is not required.

“Until 2016 and the Trump administration, it had never been an issue. They were considered eligible,” Hernandez added.

She also pointed to Fannie Mae, the government-sponsored mortgage association, which she says has similar guidelines to the FHA's and recently released a policy reiterating that it has always provided and will continue to provide DACA recipients with conventional home loans.