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National Review
National Review
26 Mar 2025
Audrey Fahlberg


NextImg:Exclusive: HUD Cracks Down on Government-Backed Mortgages for Illegal Immigrants

The Department of Housing and Urban Development announced on Wednesday that non-permanent residents will no longer be eligible for Federal Housing Administration (FHA) mortgages, National Review has learned, part of a broader effort by the administration to ensure that American citizens are prioritized under taxpayer-funded housing programs following massive flow of illegal immigration under former President Joe Biden.

FHA loans offer government-insured mortgages to ensure that lower-income individuals have access to home ownership. While illegal immigrants are technically ineligible to obtain FHA-backed home loans under U.S. law, HUD’s announcement will strengthen enforcement mechanisms to ensure that illegal immigrants are not abusing the program in the future. It is unclear how many illegal immigrants have obtained FHA-backed loans.

“FHA does not retain citizenship or residency data from the loan application and therefore does not maintain information on the number of non-permanent residents who have received FHA-insured loans under past policies,” General Deputy Assistant Secretary for Housing Jeffrey D. Little wrote in a March 26 mortgagee letter shared exclusively with National Review. “This update ensures that FHA’s mortgage insurance programs are administered in accordance with Administration priorities while fulfilling its mission of providing access to homeownership.”

The new policy will also prohibit government-backed mortgages for non-permanent residents moving forward. “Currently, non-permanent residents are subject to immigration laws that can affect their ability to remain legally in the country,” Little wrote in the March 26 memo. “This uncertainty poses a challenge for FHA as the ability to fulfill long-term financial obligations depends on stable residency and employment.”

HUD’s revised residency requirements for FHA-backed loans, which take effect on May 25, will apply to Deferred Action for Childhood Arrivals (DACA) recipients as well as individuals who are pending asylum or pending refugee status, according to HUD, since there is no guarantee that their residency status will be renewed under the current administration.

The new policy eliminates the “non-permanent resident” category entirely from the FHA’s Single Family Title I and Title II programs, and reverses a Biden-era policy which allows FHA loans for DACA recipients who provide a valid Social Security Number and work eligibility status.

HUD Secretary Scott Turner’s announcement is in keeping with President Donald Trump’s immigration related executive orders, and will be applied to a future version of HUD’s  Single Family Housing Policy Handbook 4000.1. Earlier this week, HUD and the Department of Homeland Security released a Memorandum of Understanding to announce both agencies’ coordination on efforts to crack down on tax-payer funded public housing for illegal immigrants.

“There will be no more illegal aliens getting HUD-backed home loans,” Secretary Turner said in a statement to NR. “The Biden administration exploited taxpayer resources and manipulated FHA policy to allow illegal aliens to ride the coattails of the American taxpayer when financing on a home. For those who play by the rules and work hard to purchase a home, it is unconscionable. HUD will continue to implement President Trump’s executive order ending taxpayer subsidization of open borders and protecting the American Dream of homeownership.”

On the 2024 campaign trail, Trump told his supporters he would ban illegal immigrants from obtaining home mortgages if he won a second term. While illegal immigrants are not legally eligible for FHA-backed mortgages, they can legally obtain untraditional mortgages under the USA Patriot Act of 2001, which permitted banks to start using an Individual Tax Identification Number (ITIN) as an alternative to a Social Security Numbers (SSN) to verify residence.

Though the data are sparse, the Urban Institute, a Washington, D.C.,-based think tank, released a brief in early 2024 estimating that between 5,000 and 6,000 home loans were awarded to ITIN holders in 2023. Illegal immigrants are much more likely to file their taxes using an ITIN because they do not have SSNs.