Senators: Decision to halt FHA lending to DACA recipients is unacceptable

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WASHINGTON — A group of Senate Democrats have called on Department of Housing and Urban Development Secretary Ben Carson to reverse his agency’s opinion that borrowers in the Deferred Action for Childhood Arrivals program are ineligible for Federal Housing Administration loans.

Sen. Sherrod Brown, D-Ohio, the ranking member of the Senate Banking Committee, and fellow committee members Sens. Bob Menendez, D-N.J., and Catherine Cortez Masto, D-Nev., were joined by Sen. Cory Booker, D-N.J., in admonishing HUD for halting the Obama administration’s practice of lending to young immigrants who were brought to the U.S. illegally before they were 16.

The Trump administration previously denied that DACA recipients were ineligible following reports by BuzzFeed and HousingWire last year that mortgage lenders were being told to reject applicants subject to the immigration policy for FHA loans.

But in a June 11 letter to Rep. Pete Aguilar, D-Calif., HUD Assistant Secretary Len Wolfson said that "because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans.”

The letter was in stark contrast to previous comments made by Carson himself in front of the House Appropriations Committee, where he said during a hearing in April that he was “sure we have plenty of DACA recipients who have FHA mortgages.”

Brown, Menendez, Booker and Cortez Masto said they were deeply disturbed to learn of HUD’s decision to deny loans to DACA recipients in a letter sent June 21 to Carson.

“HUD’s decision to deny access to FHA-insured loans to DACA recipients is unacceptable, harsh, and shortsighted,” the senators said. “To deny thousands of young people who live, pursued their education, served in the military and work in this country an opportunity for homeownership puts these young adults at a financial disadvantage that will have long-term consequences for them, their families and their communities.”

The senators also expressed their dissatisfaction with the department’s communication about the guidance, citing Wolfson’s letter, which avowed that HUD had not made any formal or informal policy changes related to FHA eligibility requirements for DACA recipients.

“HUD’s decision to reverse years of practice with a private letter to a member of Congress is the height of obfuscation,” the senators said. “Not only has HUD misled Congress in its prior written responses and your oral testimony, it has also changed the rules on lenders and thousands of young people with no notice or explanation.”

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Policymaking First time home buyers Mortgages Sherrod Brown HUD FHA Senate Banking Committee