FHA Mortgages

FHA Clarifies Eligibility Necessities for Sure Non-Everlasting Residents | Weiner Brodsky Kider PC


The FHA recently published the Mortgagee Letter 2021-12 (ML 2021-12), which clarifies the eligibility requirements for recipients of Deferred Action for Childhood Arrivals (DACA) and the documentation requirements for citizens of the Free Associated States (FAS) and H-1B- Nonimmigrant changes. The new guidelines apply to all FHA Title II Single Family forward mortgage programs. Mortgage holders can implement ML 2021-12 guidelines immediately, but must implement those guidelines for mortgages with FHA case numbers assigned on or after July 26, 2021.

In particular, ML 2021-12 clarifies and implements existing eligibility requirements for non-permanent residents who have deferred action under the DACA policy previously published in the HUD dated 19), which states that non-US citizens are not legally resident in the United States are not eligible for FHA-insured mortgage loans. WBK has previously discussed the waiver of HUD here.

ML 2021-12 also removes the requirement to have an Employment Permit Document, Form I-766 (EAD), for non-permanent residents who are FAS citizens and certain individuals who retain legitimate H-1B nonimmigrant status and demonstrate stable employment have to catch up. However, applicants must still meet all other relevant eligibility requirements for FHA-insured funding. The FHA declares that this policy update is in compliance with the respective Compacts of Free Associations (CFAs) between the FAS and the United States.

Additionally, the FHA notes that the residence requirements in the SF manual will be updated to reflect the changes made by ML 2021-21.