DACA Mortgages: Buying a Home as a Dreamer
February 19th, 2021
February 19th, 2021
As a dreamer, you are used to running up against a lifetime of obstacles. You may expect to encounter the same when you go to apply for a mortgage. But did you know that you are legally eligible to purchase a home with DACA status?
As a dreamer, you are lawfully abiding in the United States under the Deferred Action for Childhood Arrivals (DACA) program.
As stated here by Freddie Mac, “A non-U.S. citizen who is lawfully residing in the U.S. as a permanent or nonpermanent resident alien is eligible for a Mortgage on the same terms as a U.S. citizen.”
Not every type of mortgage is available to DACA members, but you do have options. To purchase a home, you will need to verify your legal residency when you apply.
Simply having DACA status is not sufficient to provide the proof you need for your application.
What you need to show is your social security (SS) card and your Employment Authorization Document (EAD).
What if your EAD is set to expire inside of a year? So long as you have had your residency renewed successfully in the past, generally a lender will move forward under the assumption that it will be renewed again.
If you do not have any past renewals on record, a lender will make a determination about how likely it is that your EAD will be renewed using USCIS information.
At this time, you cannot apply for a USDA or VA mortgage if you have DACA status.
For a long time, it was also not possible to apply for an FHA loan as a dreamer, but that changed as of January 19, 2021.
You can find the relevant memo here, dated January 20th, 2021. The memo states, “Effective January 19, 2021, the Federal Housing Administration (FHA) is permitting individuals classified under the “Deferred Action for Childhood Arrivals” program (DACA) with the U.S. Citizenship & Immigration Service (USCIS) and are legally permitted to work in the U.S. are eligible to apply for mortgages backed by the FHA.”
The following requirements are listed to apply for an FHA loan with DACA status:
As a DACA recipient, you also are welcome to apply for a conventional mortgage.
Whichever type of mortgage you apply for, you will need to be able to prove you can afford it, just as a citizen would.
That means that you will need to have a sufficiently high credit score and low debt-to-income (DTI) ratio, and be able to make a down payment.
The minimum down payment for a conventional loan is 3%. For an FHA loan, it is 3.5%.
FHA loans offer more flexible credit qualifications than conventional loans, and may have more competitive rates, but they do require mortgage insurance.
Q: My bank turned me down for a DACA home loan. Where can I get one?
A: Not all banks or mortgage companies handle DACA loans. If you were turned down by another lender, you will need to work with a company that can process these loans. Grandview Lending can help you apply for a DACA mortgage.
Q: Are DACA loans slow?
A: No. If you have the documentation you need, we can walk you rapidly through the loan process so you can close fast on your dream home.
Q: If English is not my first language, can I still get a loan?
A: Yes. In fact, Grandview Lending has a Spanish language loan officer who can walk you through the process in your native language so that everything is simple and clear. We also can recommend highly sought-out Spanish-speaking realtors to you.
While there are many challenges that go with being a dreamer in the US, buying a home doesn’t have to be one of them. To apply for a DACA mortgage in Indiana now, please give Grandview Lending a call at (317) 255-0062.
We provide our clients with exceptional service and integrity which has become our hallmark.