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The Department of Housing and Urban Development (HUD)’s order to “crack down” on non-permanent residents receiving mortgages insured by the Federal Housing Administration (FHA) is a “setback,” the leader of the nation’s largest Hispanic real estate trade group said Wednesday.
Gary Acosta, the co-founder and CEO of the National Association of Hispanic Real Estate Professionals (NAHREP), said that the policy change — which eliminates the non-permanent resident category from eligibility for the FHA’s Single Family Title I and Title II programs — wasn’t a “typical Republican move.”
“And the reason I say that is because Republicans have historically been the party of what I describe as the ownership society. … Homeownership is a critical component of that … so to me, this is contrary to that,” Acosta said. “Is it going to affect a lot of people? It’s hard to say. There are lenders who have already reached out to me to say that this is going to have an impact on their pipelines and in their loan volumes.
“It may sound a little bit Pollyanna-ish, but we survived without it for a long time and will survive again without it. But it is a setback and I don’t want to minimize that,” he added.
The policy change, which is mandatory starting May 25, was announced on the final day of NAHREP’s homeownership and housing policy conference in Washington, D.C.
Interestingly, it was during the first Trump administration, under former FHA Commissioner Brian Montgomery, that DACA recipients were given approval for FHA loans in the first place.
“HUD is prioritizing Americans, not illegal aliens,” HUD Secretary Scott Turner wrote in a post on X. “@POTUS promised to end taxpayer subsidies for illegals, and today, we put an end to illegals receiving FHA home loans.”
The change in policy came days after HUD said that it would work with Department of Homeland Security officials to ban undocumented migrants from public housing.
It’s unclear how many non-permanent residents have mortgages insured by the FHA. The agency has said that it doesn’t collect or retain information on an applicant’s citizenship status.
One loan originator in Texas told HousingWire on Wednesday that the majority of his business comes from Hispanic clients, but he’s rarely seen non-permanent residents receive FHA loans. But the LO, who requested anonymity, said that it is not uncommon for spouses and other family members of FHA applicants to not have permanent residency status.
Hispanics tend to utilize FHA programs more than other groups as nearly 30% of mortgages originated to Hispanic borrowers in 2023 were from the FHA, per NAHREP.
Acosta noted that the Federal Housing Finance Agency‘s termination of special purpose credit programs will also have a measurable impact on Hispanic communities.
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