The Trump administration changed housing policy to deny federally backed housing loans to young undocumented immigrants while repeatedly telling Congress there were no changes made, according to internal emails and other documents from the federal housing agency.
Though the practice of denying federally backed home loans to recipients of the Deferred Action for Childhood Arrival program had been going on for months before, officials with the Housing and Urban Development Department made a specific internal decision by August 2018 to exclude them from the program, according to the emails and internal memos.
The documents were obtained by Democracy Forward through a Freedom of Information Act request and provided to BuzzFeed News. Democracy Forward wrote a letter, which is expected to be submitted Friday, calling for HUD Inspector General Rae Oliver Davis to open an investigation into whether the agency violated federal law by changing its policy without allowing for a public notice and comment period and by failing to disclose the change to Congress and the public.
DACA recipients, loan officers, realtors, and industry associations told BuzzFeed News in December 2018 that federal housing officials were telling them to shut DACA recipients out of the Federal Housing Administration’s home loan program after years of being told they were eligible.
Housing Secretary Ben Carson denied that there was any shift in how DACA recipients were being treated, and HUD did not publicly admit it was denying these loans until June 2019. During public testimony to congressional committees and in private meetings with members of Congress following BuzzFeed News’ initial reporting, Carson and other HUD staffers repeatedly said there was no policy change.
Carson went so far as to say he “asked around” after reading the story. “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,” he said during a congressional hearing in April 2019 after being asked by Rep. Pete Aguilar of California about BuzzFeed News’ reporting.
The newly obtained emails show that HUD officials were telling lenders not to approve FHA-backed loans from at least early 2018, and that they had made a specific decision by that August to use an employment authorization category that only applies to DACA recipients to justify excluding them, though it’s not clear why that category was considered disqualifying. That decision was communicated to staff during an internal credit policy conference call on Aug. 30, 2018.
The general consensus that HUD officials formed in their internal emails was that “lawful residency,” which is required to qualify for the loans, was the same as “lawful status”; this disregards that while federal immigration authorities say DACA “does not confer lawful status,” its recipients are “lawfully present” in the United States.
DACA status is not directly addressed in the FHA single-family housing handbook, the document lenders refer to for rules on government-backed housing loans. The handbook says only that an Employment Authorization Document — which DACA recipients have — is necessary “to substantiate work status” for noncitizens.
The internal HUD documents show that officials made the decision to start telling lenders that the specific type of EAD that DACA recipients have, a C-33 EAD, was no longer valid for government-backed loans, something they had never included in their assessment of who was eligible for the loans in the years since DACA was implemented in 2012.
“Although our policy has always been that they must have lawful residency to qualify for an FHA mortgage, we never used the category codes on the EAD card to determine this and I think everyone just assumed that they had lawful status if they had an EAD card (Makes sense — why would USCIS issue a card if the person wasn’t lawfully allowed in the country??). … [W]e are now enforcing using the category code,” Deanna DiMarino, a staffer in the office of FHA Commissioner Brian Montgomery, wrote in an email to colleagues on Nov. 28, 2018.
She wrote in the same email that HUD needed to “be sure we can back up the lawful residency piece via USCIS, which has been a major challenge to do.”
Internal guidance from HUD’s Escalation Review Committee on Nov. 27, 2018, again reinforced the agency’s change in policy to use the employment authorization to exclude DACA recipients — “confirming that DACA recipients do not meet FHA’s lawful residency requirements.”
The loans provided by the FHA are designed to be more accessible to buyers with low incomes. They require a lower down payment than most conventional mortgages. Because they’re insured by the government, they provide assurance for lenders in case the borrower defaults on payments. The loans are not restricted to US citizens or permanent residents — some people on temporary work visas, for example, can qualify.
People working with DACA recipients on housing say they noticed the change in guidance after President Donald Trump first unsuccessfully moved to rescind the program.
The emails come as the Supreme Court is set to soon decide on the fate of the DACA program, which allows hundreds of thousands of undocumented immigrants to live and work in the US. Former president Barack Obama instituted the program in 2012 to protect from deportation those who came to the US as children.
The Trump administration moved to close down the program in 2017, but that decision was later blocked by the federal courts. The Supreme Court later took up the arguments, and the conservative justices appeared to side with the administration's case to rescind the protections. Advocates have argued that such a decision would violate the Administrative Procedure Act, and the administration did not offer a full explanation for attempting to shut the program down.
A decision on the future of the program is expected this summer, during the height of the presidential campaign. Trump has made restricting immigration a hallmark of his tenure and candidacy.
“The Trump administration’s unacknowledged, unlawful decision to deny DACA recipients federal home loan eligibility hurt DACA recipients and lenders and created uncertainty in the home mortgage market. It was an administrative trainwreck — and yet another example of what happens when the Trump administration’s disregard for immigrants and inability to govern collide,” said Robin Thurston, senior counsel for Democracy Forward.