DACA Recipients Can Get Home Purchase Loans Through FHA

In 2021 the US Federal Housing Administration (HUD) announced that DACA recipients, who were in the market for buying a home, were eligible to apply for low-interest, flexible loans from the FHA.

The loan has been popular with 7.8 million homeowners due to its higher debt-to-income ratio, minimum down payment requirement of 3.5%, among other benefits. Dreamers can jump into the market without needing to have the recommended standard down payment of 20% for private mortgages, making the path to home ownership more accessible than ever.

Note: The FHA loan itself is unsecured. Applicants still need to find FHA lenders who will make a decision based on your qualifications.

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What are the advantages of loans = FHA?

Besides the low down payment percentage, FHA loans are available for people who may not have good credit or those who have debt that would otherwise make them ineligible to borrow in other settings.

For context: A credit score is a number that reflects your creditworthiness by analyzing your credit history, types of loans, among others – the higher the better. (The average New York credit score is 703)

The median credit score in the United States for those who take out a mortgage is 786. In comparison, FHA loans can be given to people with a 580* credit score who might be eligible for a 3.5% down payment. Others with a credit score below 580 but above 500 may be required to deposit 10%.

FHA loans are also more forgiving for people with above-average debt-to-income ratios (DTIs). DTI measures the amount you owe each month to the amount of income you earn – a high DTI could make people ineligible for certain loans, as liabilities could exceed current income level.

Essentially, FHA loans are a great option for homebuyers who may not have a perfect credit score or who have incurred debt due to emergencies beyond their control. However, it is still encouraged to have a healthy credit rating in the United States as it opens more doors and opportunities (such as low interest rates) for those who wish to take out loans.

To apply, individuals must find an FHA lending institution near them as they would with other conventional mortgage lenders.

For more information on loans and the FHA program in New York, please visit:

FHA Resource Center | email | toll free: (800-225-5342) | TTY: (800) 877-8339

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