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Editorial Note: The following article contains information about Deferred Action for Childhood Arrivals (DACA). As of late 2017, the Trump Administration is in the process of phasing the DACA program out. It is possible, in the future, that no new DACA applications will be accepted and processed.
For many DACA recipients, the U.S. is the only home they’ve ever known, so it’s no wonder that they’d want to put down some permanent roots and buy a home. But is it possible to get a mortgage and buy a home on DACA? Are there lenders or assistance programs that look at more than residency status?
The answers to these questions and more are highly dependent on the status of the DACA program and an individual borrower’s situation.
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The short answer is yes. Regardless of your residential status in the U.S. there are virtually no limits on who can buy and own property in the U.S., which means DACA recipients may buy homes.
That said, a DACA recipient’s ability to secure a mortgage in the U.S. is limited and there are few assistance programs available to help with the purchase of a home.
Applying for a mortgage is not difficult. Once you find a home to purchase and a lender, you can start your application. The application will ask for some general information regarding your employment and income as well as personal information and details about the property in question.
During the application, you will be asked whether you’re a U.S. citizen or a lawful permanent resident. It is imperative that you are honest with your lender about your residency status.
In addition to your application, you will need to provide some additional information to your lender. To get a DACA home loan, you will need:
The lender will use this information to determine your eligibility for a mortgage and to determine your loan amount and the terms of your loan.
Receiving DACA home loans will only be possible if you provide some specific documents. This documentation will verify your employment as well as your residency status for potential lenders. When applying for a DACA mortgage, you will need to provide:
Current Employment Authorization Document (EAD) – This document is given by the USCIS under category C33. It verifies your ability to work in the U.S. and to receive an income.
Social Security Number – Your Social Security Number will verify how many years you’ve spent in the workplace as well as your previous earnings.
Previous Expired EAD Card – An expired EAD card will show a potential lender that you’ve qualified for renewal in the past and that you will likely continue to have your EAD renewed, meaning you will be able to continue working and maintain payments on your mortgage.
Bank Statements – In addition to establishing a work history, you’ll want to establish a history of consistent income when applying for a loan (preferably 24 months’ worth) to show the lender that you will be able to maintain your payment schedule.
Additional Income Documents – You will also want to provide additional income-related documentation, including federal income tax returns, W-2 statements, and pay stubs copies, when applying for a loan. The more proof of consistent income you can provide, the more faith the lender will have that you can pay back the mortgage.
Lenders giving loans to non-permanent residents are required to validate and document an SSN for each borrower on the mortgage by:
If your EAD will expire within 1 year and there is a history of the existence of prior residency status renewals, lenders can assume continued employment beyond the expiry of the EAD.
If no prior renewals exist, the lender must then determine whether the likelihood of renewal exists based on information from the USCIS.
There are currently no home assistance programs specifically designed to assist dreamers in buying a home. As a DACA recipient, you may qualify for non-specific homebuying programs Such as National Homebuyers Fund or First Home Club from Quontic Bank.
Visit their sites for more information and to see if you qualify.
The Federal Housing Administration announced in June 2019 that it would no longer be backing DACA mortgages.
In a letter, Housing and Urban Development Assistant Secretary Len Wolfson explained, “Determination of citizenship and immigration status is not the responsibility of HUD, and the Department relies on other government agencies for this information. Accordingly, because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans.”
For more information about FHA loans, click here.
At this time, DACA recipients do not qualify for USDA loans. According to the USDA, “USDA guaranteed home loans can fund only owner-occupied primary residences. Other eligibility requirements include: U.S. citizenship (or permanent residency). A monthly payment — including principal, interest, insurance and taxes — that’s 29% or less of your monthly income.”
For more information about USDA home loans, click here.
Even if you can find a home to buy and qualify for home loan assistance, buying a home will still be an expensive undertaking–the average cost of a home in the U.S. is currently $200,000.
Regardless of the cost of the home, most lenders prefer for homebuyers to make a down payment of 20%. Of course, the best option for a down payment is to pay it in cash, but most people can’t afford the large cost out-of-pocket.
If you can’t pay your down payment in cash, your next option will be a personal loan from a credit union or from a private lender. Both offer personal loans that may be applied toward the cost of down payment, but each will have different requirements to borrow. Generally, you must be part of a credit union to take a loan.
The good news, though, is that if you’ve already qualified for a mortgage, you probably meet the general criteria for taking out a personal loan. Generally, lenders look at the following to determine whether you are eligible for a loan:
If you’re a DACA recipient who wants to own a home in the U.S., the good news is that it’s possible. It won’t necessarily be easy to find a mortgage, but it is possible.
So, once you find a home and apply for a mortgage, you’re going then want to take advantage of any existing assistance programs and put together money for your down payment.