This week Ask the Underwriter is doing something different and trying to get HUD to Answer the Underwriter. As you will see documented in this article, HUD has refused to respond to private requests for clarification on the eligibility of DACA Borrowers for FHA financing. So, now I am making a public request to HUD:

Dear HUD,

In May, during a HUD training session, the HUD Single Family Deputy Assistant Secretary verbally communicated that DACA Recipients are not eligible. On August 24th, the Atlanta HOC stated, in writing, that DACA Recipients are not eligible. But on August 27th, The HUD Public Relations Specialist refuted both in writing and stated that there is no specific policy regarding DACA Borrowers. Is HUD’s policy that of the Secretary and Atlanta HOC or is the Official from your Public Relations Office correct?

If there is a specific HUD policy excluding DACA recipients -

DACA recipients meet all of the eligibility requirements outlined in HUD Handbook 4000.1 II.A.1.b.ii.(A)(8)-(9) , so why is this class of non-resident aliens being singled out at this time as being ineligible for FHA financing? When was this decision was made? Who made this decision? When will this policy be put in writing? When will FHA stop insuring loans made to DACA Recipients?

If there is not a specific HUD policy excluding DACA Recipients -

Why are HUD Officials and HOCs telling lenders that DACA recipients are not eligible for FHA financing? Have HOCs been instructed to tell lenders false information by HUD Officials? Will HUD direct HUD Officials and HOCs to stop misinforming lenders? Will HUD issue clarification stating that DACA Recipients are eligible for FHA Financing according to current guidelines?

It is imperative that HUD issue a definitive answer on this question because refusing to do so is creating chaos and uncertainty for thousands of borrowers and causing mortgage lenders to lose millions of dollars in revenue by having to turn down loans out of fear that FHA will not insure those loans.

Sincerely,

Ask the Underwriter

Let me explain why this public request to HUD has become necessary - Since publishing an Article in May of 2018, explaining that based on FHA Guidelines, DACA Borrowers are eligible for FHA Loans, I have received tons of emails from Loan Officers and other Lender Representatives, telling me that they have been told by HUD Officials, that DACA borrowers are no longer eligible for FHA Loans.

One such email stated that the HUD Single Family Deputy Assistant Secretary, Gisele Roget, told a group of Lenders at a Conference in Santa Ana, that DACA Borrowers are no longer eligible for FHA Loans and all Homeownership Centers have been instructed to communicate this to Lenders who are asking for clarification on this topic. Every Lender that I have spoken to, tells the same story - HUD/FHA has verbally communicated that DACA Borrowers are not eligible for FHA financing, but have refused to communicate this in writing.

I reached out to FHA via email to get clarification in writing and on August 24, 2018 the Atlanta HOC, replied via email and stated that an EAD Category of “C33 is unacceptable” and included HUD Handbook 4000.1 II.A.1.b.ii.(A)(8)-(9) requirements regarding US Citizenship:

United States (U .S.) citizenship is not required for eligibility. The lender must determine the residency status of the borrower based on information provided on the application and other applicable documentation. In no case is a Social Security card sufficient to prove immigration or work status.

A borrower who is a non-permanent resident alien may be eligible provided:

• The property will be the borrower’s principal residence;

• The borrower has a valid Social Security Number (SSN), except for those employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD;

• The borrower is eligible to work in the U.S., as evidenced by the Employment Authorization Document issued by the USCIS; and

• The borrower satisfies the same requirements, terms and conditions as those for U.S. citizens.

The guideline that the Atlanta HOC provided does as the basis for Category C33 being unacceptable does not actually list any requirements that would preclude Category C33 from being eligible. When I requested further explanation, the Atlanta HOC did not respond.

I then emailed Brian Sullivan, HUD’s Supervisory Public Affairs Specialist, asking him to clarify HUD’s Policy on DACA Borrowers. I have included the full email exchange below.









So, now we have an Official at HUD contradicting the Atlanta HOC and stating that HUD DOES NOT have a specific policy regarding DACA Borrowers.





After essentially begging HUD privately to provide a definitive answer on whether DACA Borrowers are eligible for FHA financing, the HUD Public Relations Specialist and the Atlanta HOC have both stopped replying to my emails.

It is my hope that HUD will respond to this public request and Answer the Underwriter.



