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Federal Loans Banned for Immigrants Without Permanent Residency

NO ACCESS TO FHA MORTGAGES | DACA recipients, asylum seekers, pending refugees, and work visa holders are affected by HUD’s decision. (Photo/Facebook)

HUD BLOCKS FHA MORTGAGES FOR THOSE WITHOUT A GREEN CARD

Newsroom El Comercio de Colorado Newsroom

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The Secretary of the Department of Housing and Urban Development (HUD), Scott Turner, announced a change in residency requirements for mortgages insured by the Federal Housing Administration (FHA). Starting May 25, 2025, the category of “non-permanent residents” will be removed from federal mortgage loan programs, preventing individuals without permanent immigration status from obtaining government-backed financing.

This measure is part of a series of actions by the Trump administration to restrict federal benefits for immigrants without permanent legal status. According to Turner’s statement, “this decision seeks to protect taxpayer resources and ensure that public housing programs exclusively benefit U.S. citizens and lawful permanent residents”.

Impacts DACA, Asylum Seekers, and Refugees

Until now, individuals with temporary immigration status—such as DACA recipients, asylum seekers, pending refugees, and work visa holders—were eligible for FHA mortgages if they had a valid Social Security number and work authorization. All of these groups will now be excluded from the FHA Title I and Title II programs, including standard loans (203b), home renovation loans (203k), reverse mortgages (HECM), and financing for mobile homes or home improvements.

HUD also noted that a significant number of residents in subsidized or public housing lack verified immigration documentation, leading to a cooperative agreement with the Department of Homeland Security (DHS) to strengthen control over these benefits and enable data sharing between agencies. This decision will directly impact thousands of families who had previously met the requirements and accessed housing through these loans, particularly in immigrant and low-income communities.

Federal Loans Banned for Immigrants Without Permanent Residency

INFORMATION SHARING | Scott Turner, Secretary of Housing and Urban Development (HUD), and Kristi Noem, Secretary of Homeland Security (DHS). (Photo/HUD)

Thousands of ITIN Home Loans

Institutions such as the Urban Institute estimated that between 5,000 and 6,000 mortgages were issued to people using an Individual Taxpayer Identification Number (ITIN) in 2023. In addition to the immediate effect on those currently applying under the old rules, real estate experts predict a possible drop in housing demand from this population segment, which could also impact developers, lenders, and the housing market at large.

Turner defended the measure by stating that “it is unconscionable that those who follow the rules and work hard to buy a home should see public resources used to benefit those without legal status.” The policy is also part of Trump’s executive order banning the use of public subsidies in favor of illegal immigration.

Federal Loans Banned for Immigrants Without Permanent Residency

Lenders will be required to implement the new rule starting May 25. According to HUD, a Social Security card alone will no longer be enough to prove immigration eligibility. Documentation issued by U.S. Citizenship and Immigration Services (USCIS) confirming lawful permanent residency will be required.