-
Can I purchase a home under DACA?
Can I purchase a home under DACA?
-
1 Reply
-
You can buy a house under DACA (Deferred Action for Childhood Arrivals). Still, your financing choices might not be as accommodating as for a U.S. citizen or permanent resident. Here is what you should understand regarding the acquisition of a house when being a DACA recipient:
Loan Options for DACA Recipients:
Loans with Conventional Terms (Fannie Mae)
Qualification: As of now, it was mentioned that DACA recipients are, in fact, qualified to seek conventional loans backed by the government-sponsored entities (GSEs) Fannie Mae.
Requirements: Valid, unrevoked
Employment Authorization Document (EAD).
Credit history and income meet net worth requirements, and buyers meet regular conventional loan standards.
This kind of loan usually has stricter terms than government-backed loans. The borrower must often have a credit score of over 620 and make a down payment of 3-20%.
Benefits: The interest rates are better than those of non-QM or private loans.
FHA Loans
Not Available: DACA recipients still need to be disqualified from FHA loans. However, they were granted the privilege of a lifted down payment.
Federal Housing Administration (FHA) loans, which have low deposit requirements and are aimed at first-time buyers, are not available for DACA recipients.
Non-QM Loans (Non-Qualified Mortgage Loans)
Qualification: Non-QM loans, in most cases, don’t have to do with Fannie Mae, Freddie Mac, or government organizations that deal with DACA recipients.
Requirements: Less rigid policies related to borrowing to income to loan documentation.
Higher interest rates than conventional house loans in addition to the 10-30% additional down payments than the former.
Advantages:
Target Audience: Borrowers who have limited access to traditional loans on account of credit history or income documentation are eligible for these loans.
ITIN Loans are typically offered to borrowers without a Social Security Number.
Eligibility: ITIN loans are available for foreign nationals who do not hold a Social Security Number but have an Individual Taxpayer Identification Number.
Requirements:
Need an ITIN in place of an SSN.
Larger deposits (roughly 15 – 30%) and larger rates of interest.
Advantages: It makes borrowing possible, especially for those who need access to a conventional loan.
Main Points:
Employment Authorization: A valid Employment Authorization Document (EAD) issued by the United States Citizenship and Immigration Services (USCIS) is required.
Resilience: Like any other borrower, lenders will examine a borrower’s employment and income history over a given period of time.
Credit score: Still, this is critical when applying for conventional loans. Target a credit score of 620 and above to lower your mortgage terms.
Down Payment: While some conventional loans may go as low as a 3% down payment, most will do better if more is saved as it improves chances of approval and leads to better loan conditions.
Documentation: Standard documents required when applying for a loan include proof of income, copies of tax returns, bank statements, and proof of residency.
Next Steps:
Consult with a Lender Experienced in DACA Loans:
Every lender knows all types of loan programs. There is no such thing as a DACA lender. Hence, it is essential to look for someone who understands your case.
Check Your EAD Status: Ensure your Employment Authorization Document is current, as it is essential for getting the loan.
Explore Non-QM Loan Options: If you cannot qualify for a regular loan, then non-QM loans can provide the best alternatives for home financing.
As a DACA recipient, you can own a house simply by gathering the necessary documents, cleaning your credit rating, and looking for other forms of loans.