DACA Home Loans
DACA home loans can be something very useful if you came to the U.S. as a child and you’re afraid you will get deported. It’s a terrifying thought, but even if you lack the necessary documentation as an immigrant, you can get some protection thanks to DACA. In this article, you will find out all there is to know about this program.
What Is DACA?
DACA, short for Deferred Action for Childhood Arrivals, is a program that aids immigrant children from being deported. It acts as a form of protection for those who came to the United States while they were children and keeps them safe from deportation.
Basically, this relief can also apply to those who don’t have documentation. Through DACA, you will receive a work permit and will be protected from deportation. As long as you came to the States before you turned 16 and you were below the age of 31 years old on June 15, 2012, DACA may apply to you.
However, to be eligible for a DACA, you need to be a well-behaved individual. That means you shouldn’t have been involved in illegal things or caused any problems in the States.
You may also be eligible if you are a student or a high school graduate. If you’ve been discharged in an honorable way from the military or the Coast Guard, you qualify for DACA as well.
Make sure that you came to the States before June 15, 2012 – whether you had documents or not – and that your lawful status became invalid as of June 15, 2012.
Can DACA Recipients Buy a House?
DACA home loans may be harder to obtain once you’re a DACA recipient. Thankfully, it’s not impossible, but it’s more challenging indeed.
Only those who are residents of the United States – even if they’re non-permanent ones – can obtain multiple types of mortgages. That being said, if you want to enjoy the same benefit, you will have to provide proof that you are a U.S. resident. By doing so, you will increase your chances of getting a conventional loan and buying a home.
Nevertheless, you need to bear in mind that not all loan programs operate the same way. Some of them may interpret DACA differently, meaning that in some cases, the policies they set around it might still not grant you access to a loan.
Required Documents for a DACA Mortgage
Receiving DACA home loans will only be possible if you provide some specific documents. This documentation helps you as it will allow your work status and residency to be verified. Therefore, when you apply for the DACA loan, here is what you should provide:
- Current Employment Authorization Document – This document is given by the U.S. Citizenship and Immigration Services under category C33. It’s an EAD card, and you must have it during your application.
- Social Security Number – Don’t forget to bring your SSN too. It will reveal how many years you’ve spent in the workplace, as well as the earnings you’ve made during your life.
- Previous Expired EAD Card – You should consider showing your previous EAD card that is no longer available. Usually, lenders will think that your residency status will keep being renewed by the USCIS.
- Bank Statements – The lender must know whether you’re able to pay off the loan or not, otherwise, they’re entering a risky situation. If you have stable account balances, then you’ll be easier to trust, and the lender will be more confident that you’ll have a situation good enough to repay the loan. Make sure to bring some recent bank statements, preferably ones that cover at least two months.
- Income Documents – There are situations when borrowers take out a loan but they don’t have the financial stability to pay it off. So, lenders don’t really trust anyone to repay the loan unless they have a stable income. Bring some income documents when applying for a mortgage, to show the lender that you’re capable of making timely payments. It all depends on what type of job you have, but these may consist of federal income tax returns, W-2 statements, pay stubs copies, or others.
Home Buying Programs for DACA Recipients
Being a DACA recipient is burdensome when you want to get a loan and buy a house, but you can get DACA home loans with various home buying programs. There are specific programs that offer benefits for DACA recipients, thus making it possible for you to become a homeowner.
You just need to look carefully and find a program that offers the benefits you’re looking for. Such programs may be Newcastle, Home for Dreamers, or Stilt. Each one wants you to work with the right lender and make sure you get the house of your dreams.
You just have to make an online application for them and wait for a response from the lenders. If you have the right documentation and meet the eligibility criteria, you will be able to buy a house, even as a DACA recipient.
Don’t forget that you have the responsibility to do some research before you buy a house and burden yourself with a loan. You will have to make sure you won’t waste any money and time, and that everything will go smoothly.
How to Get a Mortgage on DACA
The four basic requirements for non-permanent residents to apply for FHA loans are:
- The property you need a loan for will be your primary residence
- You have a valid SSN
- Proof of an Employment Authorization Document (EAD) issued by the U.S. Citizenship and Immigration Services (USCIS) permitting you to work in the U.S.
- You meet all the other general requirements (such as terms and conditions) that apply to U.S. citizens.
The Validation and Documentation of Each SSN
Lenders giving loans to non-permanent residents are required to validate and document an SSN for each borrower on the mortgage by:
- Using the FHA Connection to input the borrower’s name, date of birth, and SSN.
- Inspecting documents such as the borrower’s original payslips, W-2 forms, valid tax returns directly from the Internal Revenue Service, or any other documents used to underwrite the mortgage.
- Resolving inconsistencies during the process and reviewing multiple SSNs for individual borrowers with the Social Security Administration (SSA).
Other Requirements Related to Your EAD
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 a renewal exists based on information from the USCIS.
How to Get a DACA Home Loan
Getting DACA home loans is only possible if you prove that you’re a U.S. resident. Not having residency will put you in a tough spot, since lenders won’t really trust you. So, you can get your loan once you show some proof of your United States residency.
Applying for a DACA home loan is not that difficult as long as you have the necessary documentation. Internet is, as always, at your service, so applying online is one of the easiest options.
Once you find a good lender who you know you can trust and you’re sure approves loans for DACA recipients, you can start your application. There will be a loan application procedure where you will be asked a few questions. The approval can happen really fast depending on the lender.
Some applications will automatically sync with your bank account to check your statements and your credit history. Moreover, you’ll have the opportunity to pick between a conventional or FHA loan.
During the application, you will be asked questions such as whether you’re a U.S. citizen or not, and if you’re a permanent resident alien.
Why Banks Don’t Like to Lend to DACA Recipients
For various reasons, people need some quick cash, but not everyone has a job, or their job doesn’t pay them the right sum. So, they resort to loans, but they’re often refused.
More often than not, banks don’t really like the idea of lending to DACA recipients. As such, they begin to wonder what banks have against them. Well, the reason behind this is more straightforward than you think.
DACA recipients are not always U.S. residents, and that would put them in a risky situation. For instance, if the applicant was a citizen of the States, then they could easily track the person down if they don’t make payments on time. However, with a non-citizen, things get a little complicated, which is what makes the banks reluctant to lend to DACA recipients.
If you’re a foreigner, that means you can buy some plane tickets and leave the country at any time. So, let’s say that you take a loan, and then leave the country and never return. How is the bank going to recover that money? They would be at a loss here. And like that isn’t enough, tracking someone outside of the U.S. is quite problematic. So, it’s understandable why banks want to avoid it by not allowing non-US citizens to get a loan at all.
Also, people who are not U.S. citizens don’t have a credit history. Credit history is used to determine the habits of an individual, such as whether they are paying off their loans on the regular or they’re slacking. In other words, it is used as a means to determine a person’s creditworthiness. Since a DACA recipient may not be a U.S. resident, this means they don’t have a credit history. Thus, it would be very difficult to know how trustworthy a person is without its credit history.
Let’s also not forget the fact that non-US residents don’t always have the necessary papers to be able to take out a loan. More often than not, a loan may require you to provide proof of long-term employment or other similar things, which you may not possess.
Concurrently, if you’re not a citizen of the United States, you are unable to apply with a co-signer. Usually, when someone doesn’t have a credit history, they make up for it by applying with a co-signer. If you don’t pay, then the lender will seek the co-signer for the repayment. However, people outside the U.S. may have a harder time finding someone to co-sign.
All in all, the bank would be at risk with DACA recipients, and that’s the general reason why they don’t grant them loans.
FHA Loans for DACA
Sadly, if you’re a DACA recipient, you may not be allowed to take out an FHA loan. No recipient is eligible for it. However, there is a chance that the HUD policy will make some changes a while from now, so there might be a light at the end of the tunnel.
There was a letter on June 11 where Urban Development and U.S. Department of Housing policymakers came up with a statement. Apparently, there was a HUD official who declared that DACA recipients will still not be able to qualify for FHA loans, as DACA is unable to confer lawful status.
However, things don’t seem to end here. In the letter, it is specified that one’s immigration status and citizenship cannot be determined by the HUD. They don’t have the authority to do so. It’s the U.S. Congress instead who is qualified enough for this.
Not long ago, the Homeownership for Dreamers Act has been submitted, which may change everything for DACA recipients. In case it becomes law, then FHA mortgages could be granted to a DACA recipient.
Down Payment Loans for Homes While on DACA
If you’re looking for down payment loans for houses and you’re a DACA recipient, then you can get one through Stilt. The best thing about it is that it’s not difficult.
All you have to do is submit an application, after which you will have to wait for a response. Normally, we reply within 24 hours, so don’t be scared if you don’t see a reply immediately. We may give you a call in case we’re missing some documents that are needed for your qualification. The eligibility criteria include your credit history, a proper level of education, and current and stable employment.
After these needs are met, you will receive a promissory note where your signature is required. The signature will be the decisive factor, as it will be what grants you access to the money. We will transfer it very quickly, but it may take around 2-3 business days for it to appear in your bank account.
When the loan has been received, you are able to start making payments with your account. There’s no prepayment penalty if you choose to repay the loan earlier. We’ll look for the smallest interest rates.
If you’re in need of a loan for a home, but you’re a DACA recipient, don’t worry – you may still be able to get one, although your options are fairly limited. To get DACA home loans, you must meet the eligibility criteria and ensure that you are a U.S. resident. You will have to prove it, and you may be on your way to get a home loan.
If you have other curiosities regarding loans, you can visit our site and find out more information at any time.