You want to buy a house, but your mortgage application was refused by the bank because you are enrolled in the Deferred Action for Childhood Arrivals program. There’s no reason to be concerned. The DACA program will not only protect you from deportation, but will also assist you in obtaining a work permit, a social security card, and a driver’s license, all of which will eventually enable you to purchase your dream home.
While you are on DACA, there is no reason why you shouldn’t be allowed to acquire a loan. Granted, you may not be able to obtain a typical bank loan – but there are several handy options available to help you obtain a house loan. For example, the FHA offers mortgage assistance to DACA applicants who want to buy a home.
Why Is It So Difficult for DACA Recipients to Get a Loan?
Many lenders, notable banks, refuse to give DACA loans to persons they deem to be a “risk.” With DACA’s status in flux, there’s always the danger that the borrower may be deported as a result of a change in the legislation, making it harder for banks to recoup their funds.
Aside from the risk aspect, home loans for DACA recipients often lack the proper papers – and there’s a chance they don’t have a co-signer as well. If they ask for a bank loan, they are likely to be denied; however, if they seek a loan from an alternative lender, their chances of acceptance are substantially greater.
FHA Loan Eligibility for DACA
The following are the four primary conditions for a non-permanent resident to qualify for an FHA loan:
- Your principal residence will be the property that you are paying off with the loan.
- Your SSN must be current.
- You’ve fulfilled all of the other standard criteria for all other citizens of the United States.
- You’ve brought documentation of an Employment Authorization Document from USCIS, indicating that you’re allowed to work in the United States.
Conventional Loans Eligibility for DACA
You can also apply for conventional loans from private lenders if you are a DACA beneficiary. These loans usually do not require as much documentation, and you should not be rejected a loan even if you are deemed a risk factor. The main drawback is that you will almost certainly have a higher interest rate and a credit score of at least 650.
Documents Required for a DACA Loan
To apply for a DACA mortgage, you’ll need the following three documents:
- This is your social security number.
- Your EAD card has already expired.
- USCIS has given you an EAD card.
You’ll also need to provide proof of a steady salary, as well as a bank account balance that shows you have enough money to buy a house.
You should still be able to obtain DACA loans as a DACA holder, but you’ll need to know where to seek them. Given the risk, it is better to get professional help, or else you’ll need to get creative with your research.