WASHINGTON — Sen. Bob Menendez, a New Jersey Democrat, will introduce legislation Thursday that would stop the Trump administration from denying federally insured housing loans to young undocumented immigrants brought to the US as children. The bill was introduced in response to BuzzFeed News’ reporting, which brought the issue to light.
The Homeownership for Dreamers Act would mean that federal housing agencies and government-sponsored corporations Freddie Mac and Fannie Mae would not be allowed to refuse to back home loans for young recipients of DACA (Deferred Action for Childhood Arrivals) just because of their immigration status.
"It’s clear that this Administration, hamstrung by federal rulings that have prevented the mass deportation of DACA recipients, is now actively weaponizing the Department of Housing and Urban Development to carry out its bigoted anti-immigrant agenda," said Menendez in a statement to BuzzFeed News.
The Federal Housing Administration, which is part of the Department of Housing and Urban Development, has been advising lenders not to approve government-backed loans for DACA recipients since last year, according to several interviews with lenders, industry associations, and young immigrants hoping to buy their first homes.
“I had already sent all the paperwork that I needed; we had just done the house inspection,” said Edith Aguirre Vazquez, a DACA recipient who was rejected because of her immigration status.
After BuzzFeed News’ initial reporting on the story in December, HUD Secretary Ben Carson denied during congressional testimony in April that the FHA was telling lenders not to approve the loans.
“I asked around after I read that story,” Carson told members of Congress. “No one was aware of any changes that had been made to the policy whatsoever. I’m sure we have plenty of DACA recipients who have FHA-backed loans.”
Carson said it would “surprise” him if DACA recipients were being turned down.
Last week, HUD admitted for the first time that its policy is to deny the loans to DACA recipients.
“Because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans,” Len Wolfson, a HUD official, wrote in a letter to California Democratic Rep. Pete Aguilar on Tuesday.
Lenders and industry associations told BuzzFeed News that while the FHA has never had a specific policy that addresses DACA, they had never been given advice by FHA officials not to issue the loans until President Donald Trump took office. They said they particularly noticed the change in the year after Trump unsuccessfully moved to rescind the DACA program.
“It was not enough for Trump when he killed DACA, which protected over 800,000 immigrant youth from deportation and allowed us to work and pursue educational opportunities,” said DACA recipient Bruna Bouhid-Sollod, spokesperson for the advocacy group United We Dream, in a statement. “Now he’s come after our ability to purchase a home, put a roof over the heads of our families and to establish a foundation for our future.”
Fannie Mae proactively released a policy in March clarifying that it does not turn away DACA recipients for housing loans because of their immigration status. Some lenders argue that this strengthens the case for DACA recipients to have access to FHA-backed loans because the FHA and Fannie Mae have similar criteria for their loans.
A spokesperson for Fannie Mae told BuzzFeed News last month that the company "has a long-standing policy on eligibility for non-US-citizen borrowers."
A companion to the Senate bill passed the House Financial Services Committee last week and is likely to be passed by the Democrat-controlled House in the coming months.