DACA and mortgages: what FHA, Fannie Mae and USDA say today

If you have DACA, work and want to buy a home, you have probably heard that “FHA doesn’t take DACA anymore.” That is true, but it is not the whole story. This guide brings together what HUD (FHA), Fannie Mae (conventional loans) and USDA rules say today, what a lender may ask you and how to find one that will lend to you. The topic changes: we review this guide more often and show the date of the last check at the top.

Since case numbers from this date, FHA does not accept non-permanent residents

May 25, 2025⁶

As a citizen, at Fannie Mae, if you are a lawful non-permanent resident

Same terms⁹

How long each DACA period and its work permit last

2 years²

At least, the number the CFPB recommends contacting

3 lenders²⁰

What DACA is, in a lender’s terms

For a lender, three things the regulation says about DACA matter. First, DACA is “deferred action”: a government decision not to pursue your removal for a limited period, which does not give you a right to remain in or reenter the country. Second, during that period USCIS may grant you a work permit if you show an economic need.¹ Third, each DACA period, initial or renewal, lasts 2 years, and the work permit is issued for the same time.²

The regulation also says that, while DACA lasts, you are considered “lawfully present” under 8 CFR §1.3.¹ But that definition has a narrow use: it is titled “lawfully present aliens for purposes of applying for Social Security benefits” and applies only to that law.³ It is not a mortgage rule. Each loan program has its own residency rule, and that is what we go through section by section.

With a work permit, Social Security can assign you a Social Security number, because its regulation allows it for anyone with legal authorization to work in the United States.⁴ That number counts toward what Fannie Mae requires, as you will see below. The mortgage loan types guide explains how FHA, conventional, VA and USDA loans differ if this is new to you.

FHA: open from 2021 to 2025, closed since

The FHA loanFHA loanAn FHA loan is a mortgage made by a private lender and insured by the Federal Housing Administration (FHA), an agency of the U.S. government. That insurance protects the lender if you stop paying, which is why the lender can accept a lower down payment and a less-than-perfect credit history than on a conventional loan. Federal law sets the minimum cash investment at 3.5% of the property's value and caps the loan amount at the FHA limit, which changes by county. In exchange for the insurance you pay a mortgage insurance premium.See the full definitionClose has had two moments for DACA recipients.

In 2021, HUD Mortgagee Letter 2021-12 clarified that DACA recipients could get FHA loans, for case numbers assigned from July 26, 2021. A non-permanent resident qualified if the home would be their principal residence, they had a valid Social Security number, showed a current work permit (Form I-766) and met the same requirements as a citizen. If the permit expired within a year and there was a history of renewals, the lender could assume it would be renewed.⁵

In 2025 that changed. Mortgagee Letter 2025-09 removed the non-permanent resident section entirely, for case numbers assigned on or after May 25, 2025. Citizens, lawful permanent residents and citizens of Micronesia, the Marshall Islands and Palau remain eligible. The letter adds that a Social Security card is not enough to prove immigration or work status, and it also applies to reverse mortgages.⁶ FHA’s handbook, in its version revised in August 2026, now lists only those categories.⁷

Conventional loans: what Fannie Mae says

Fannie Mae’s rule did not change. Fannie Mae buys conventional loansconventional loanA conventional loan is any mortgage that is not insured or guaranteed by the federal government: it is not FHA, VA or USDA. The lender, or the companies that buy the loans (Fannie Mae and Freddie Mac), carry the risk. When the amount is within the conforming loan limit the loan is called "conforming"; above it, it is a "jumbo" loan. It usually asks for a higher credit score than an FHA loan and, if your down payment is less than 20% of the price, you are normally required to buy private mortgage insurance (PMI) until you build enough equity in the home.See the full definitionClose made to people who are not citizens but are lawful permanent or non-permanent residents, on the same terms as citizens. Here is the key part: Fannie Mae does not set which documents prove legal presence. The lender decides, case by case, with the documentation it deems appropriate, and when it sells the loan it warrants to Fannie Mae that the borrower is legally present in the country.⁹

That explains why two lenders give you different answers while you hold the same work permit card. It is not that one is right and the other wrong: the rule leaves that decision to each of them.

Fannie Mae also requires each borrower to have a valid Social Security number or an ITINITIN (Individual Taxpayer Identification Number)An ITIN is a nine-digit number the IRS, the federal tax agency, issues to people who need a U.S. taxpayer identification number to file taxes and are not eligible for a Social Security number. It is for tax purposes only: it does not authorize you to work in the United States, does not qualify you for Social Security benefits or the Earned Income Tax Credit, and says nothing about your immigration status. You apply with Form W-7, and it expires if it goes unused for several years. Some lenders accept an ITIN for a mortgage.See the full definitionClose, to meet residency and documentation requirements, and the lender to confirm their identity.⁸ On the money side, income must be stable, have a documented history and be reasonably expected to continue; noncitizens face the same employment and income verification as citizens.¹⁰

Three programs and what each rule says today

Closed to DACA

FHA

• Since case numbers assigned May 25, 2025, no non-permanent residents.⁶
• Eligible: citizens, permanent residents and citizens of Micronesia, the Marshall Islands and Palau.⁷
• A Social Security card does not prove status.⁶

Open if the lender accepts it

Conventional (Fannie Mae)

• Lawful non-permanent residents, on the same terms as a citizen.⁹
• Each lender decides which documents prove your legal presence.⁹
• SSN or ITIN, and stable income expected to continue.⁸¹⁰

A closed list of statuses

USDA guaranteed

• Citizens, non-citizen nationals or qualified aliens.¹²
• The qualified alien list is in 8 U.S.C. §1641.¹³

Before you apply, ask each lender under which program it would lend to you with DACA and which documents it asks for.⁹

USDA: who is a “qualified alien”

The guaranteed USDA loanUSDA loanA USDA loan is a mortgage from the Rural Housing Service, part of the U.S. Department of Agriculture (USDA). It is meant for low- and moderate-income families buying a home in an area the USDA considers rural, and it can be offered with no down payment. There are two paths: the USDA guarantees a loan made by a private lender, or it lends directly to very-low-income families. To qualify, your income must be within the limit for your area and the home must be in an eligible area, which you can check on the USDA's map.See the full definitionClose requires the applicant to show they are a citizen, a non-citizen national or a “qualified alien.”¹² The USDA regulation points to the 1996 federal law known as PRWORA, 8 U.S.C. §1641, for that definition.¹³

That law lists who is a qualified alienqualified alien"Qualified alien" is a term in a federal law, 8 U.S.C. 1641, used to decide who may apply for or receive certain federal public benefits. The law defines it with a list of categories. They include lawful permanent residents, people granted asylum, refugees, certain people paroled into the country for at least one year, people whose deportation is being withheld, Cuban and Haitian entrants and, in certain cases, people subjected to battery or extreme cruelty. The same law has exceptions and other conditions, so the definition alone does not say whether a person can receive a benefit.See the full definitionClose: lawful permanent residents, asylees, refugees, people paroled for at least one year, people whose deportation is being withheld, Cuban and Haitian entrants, people living here under a Compact of Free Association, and other categories.¹⁴ If you do not know whether your situation is on that list, that is an immigration question. You can ask an accredited representativeDOJ-accredited representativeAn accredited representative is a non-attorney whom the U.S. Department of Justice, through its Recognition and Accreditation Program, authorizes to represent people in immigration matters before DHS and, with full accreditation, before the immigration courts. They may only do so through a recognized organization, which must be a non-profit, federally tax-exempt entity. It is the safe way to get low-cost immigration help: the Department of Justice publishes the official roster by state. Anyone who is not on that roster and is not a lawyer is not authorized to represent you.See the full definitionClose recognized by the Department of Justice or an immigration lawyer.²⁴

What a lender may and may not ask

Regulation B, which carries out the Equal Credit Opportunity Act, allows a lenderlenderThe lender is the financial institution that lends you the money for your mortgage. The mortgage is the agreement that gives the lender the right to take your home if you do not repay what it lent you. After closing, it is common for another company, the loan servicer, to collect your payments and keep track of the loan; it may be the same company that lent you the money or a different one. On the Loan Estimate, the lender's name appears on the first page, and the last page lists it as "Lender" with its NMLS or license number.See the full definitionClose to ask about your permanent residency and immigration status, and about those of anyone else on the application.¹⁶ It also allows the lender to take your status into account, along with the information it needs to know how it would collect on the loan.¹⁵ Being asked is not illegal.

What the law prohibits is discrimination based on race, color, religion, national origin, sex, marital status or age in any part of the loan.¹⁷ National originnational originNational origin is one of the characteristics the Fair Housing Act protects. According to the Department of Justice, national origin discrimination can be based on the country where you were born or where your ancestors came from. The law prohibits refusing to sell or rent you a home, setting different terms or publishing ads that state a preference based on your national origin. According to the CFPB, the Equal Credit Opportunity Act also prohibits lenders from discriminating against you because of your national origin when you apply for credit, such as a mortgage.See the full definitionClose is the country where you were born or where your ancestors came from. The Justice Department has sued lenders that set stricter standards or gave worse terms to Hispanic borrowers.¹⁸

Some states go further. In Illinois, the Department of Human Rights explains that state law prohibits using immigration status to discriminate against someone who rents, buys a home or applies for a mortgage, and gives DACA recipients, people with TPS and people with deferred action as examples. There you can report housing discrimination based on immigration status within one year.¹⁹ The housing discrimination guide explains how to file a complaint.

How to find a lender that will lend to you with DACA

The CFPB recommends contacting at least three lenders: borrowers who shop around can save thousands of dollars, and each lender offers different kinds of loans.²⁰ With DACA that matters twice as much, because the decision about your documents belongs to each lender.⁹

From the first call to the offer you choose

1. 1. Gather your documents

   Before you call

   Current work permit, Social Security card, ID, proof of income and bank statements.⁸

   Try it with your numbersDocument checklist

2. 2. Make your list of lenders

   The first week

   Your local bank or credit union and other lenders in your area; a housing counselor can help you build the list.²⁰

3. 3. Ask before you apply

   On the first call

   Do you lend to DACA recipients? Under which program? Which proof of legal presence do you accept? What if my permit expires soon?⁹

4. 4. Get the Loan Estimate

   No later than 3 business days after you apply

   Everyone uses the same form. Getting it does not mean you were approved.²¹

   Try it with your numbersCompare loans

5. 5. Review the offers with a counselor

   Before you sign

   A HUD-approved counselor helps you see whether the terms fit your goals, often for free.²³

The Loan EstimateLoan EstimateThe Loan Estimate is a three-page form you receive from the lender within days of applying for a mortgage. In the same format at every bank, it sums up the terms of the loan being offered: amount, interest rate, whether the payment can change, the estimated monthly payment with taxes and insurance, the itemized closing costs and how much cash you need at closing. Because every lender uses the same form, it lets you compare offers side by side. It commits you to nothing: requesting one is not accepting the loan.See the full definitionClose is the document to compare: the lender must give it to you within three business days of your application, and everyone uses the same form.²¹ If a bank or credit union offers you a loan it keeps in its own portfolio, under its own rules, the ITIN mortgages guide explains how those work and what to compare.

Example with real numbers

What it takes to get to closing on a typical home with a conventional loan

With the typical US home value, Fannie Mae's HomeReady minimum down payment and Freddie Mac's closing cost range.

Home price (typical US value)

$332,700

HomeReady minimum down payment (3%)

$9,981

Closing costs (2% to 5% of the price)

$6,654 to $16,635

This is an example with national numbers. HomeReady has an income limit and other conditions;¹¹ closing costs vary by place.²² Your real numbers are on your Loan Estimate.

Run it with your numbersHow much house can I afford?

To see what you might afford with your own numbers, try how much house can I afford and the closing cost calculator. The down paymentdown paymentThe down payment is the part of the home's price you pay out of your own pocket when you buy; the loan covers the rest. In U.S. Spanish it is also called enganche, cuota inicial or entrada. Each loan type has its own minimum: FHA requires at least 3.5% of the value, VA and USDA loans may require none, and conventional loans ask for more if you want to avoid private mortgage insurance. A larger down payment lowers the loan, the monthly payment and the total interest; many state programs help families put it together.See the full definitionClose each lender asks for can differ; the guide on how much down payment you need explains each program’s minimums.

If this is you

Common situations

You are buying with a partner who is a citizen or resident

The lender may ask about the status of each person on the application.¹⁶ At Fannie Mae, each borrower needs an SSN or ITIN.⁸

You are a first-time buyer

HomeReady's terms depend on your income and the area.¹¹ A HUD-approved counselor helps you compare, often for free.²³

You are self-employed

Noncitizens face the same employment and income verification as citizens, whatever the source of income.¹⁰ The buying a home when self-employed guide explains which papers to gather.

You have an ITIN and no DACA

Fannie Mae accepts an ITIN but also requires legal residency;⁸ the ITIN mortgages guide explains portfolio loans.

Costly mistakes

• Mistake: Applying for an FHA loan as if the 2021 rule were still in force.

  Instead: Since case numbers assigned May 25, 2025, FHA does not accept non-permanent residents.⁶

• Mistake: Giving up after a lender's first 'no.'

  Instead: Fannie Mae lets each lender decide which documents it accepts: ask at least three.⁹²⁰

• Mistake: Thinking your Social Security card proves your status.

  Instead: Bring your current work permit: HUD says a Social Security card is not enough to prove status.⁶

• Mistake: Assuming you are being discriminated against just because you were asked about your status.

  Instead: Asking is allowed; treating you worse because of your national origin is not.¹⁶¹⁷

• Mistake: Asking a 'notario' whether buying a home affects your DACA.

  Instead: A notario cannot give legal advice; an accredited representative or a lawyer can.²⁴

What to do this week

1. Check your work permit’s expiration date and write it on your document list.²
2. Make a list of at least three lenders, starting with your local bank or credit union.²⁰
3. Ask each one, in writing if you can: “Do you lend to DACA recipients, under which program, and which proof of legal presence do you accept?”⁹
4. Request a Loan Estimate from those who say yes and compare them in the compare loans tool.²¹
5. If you wish, take the offers to a HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definitionClose before you sign.²³
6. For any question about your immigration case, look for an accredited representative on the Justice Department’s lists, sorted by state.²⁵