September 7, 2016
One not-so-commonly asked questions about FHA loans is still an important issue to address. Here’s a recent reader question on a borrower’s ability to be approved for an FHA mortgage without being a U.S. citizen:
“Ive just moved to the US from the UK on a K-1 Fiance Visa. Ive been here around 5 months. Just received my work authorization card through the mail, waiting for my social security number now. Ive been working voluntarily since I arrived…would we qualify for an FHA Mortgage Loan? Ive contacted two lenders who have told us that we might be entitled to a loan but they’re unsure.”
The short answer to this questions is that technically speaking, non-U.S. citizens are eligible for FHA home loans unless they are in the United States illegally. This does not take into account the financial qualifications of the applicant, it merely addresses whether or not a non-resident can apply for the loan.
HUD 4000.1 has instructions for the lender on this issue. They include the following:
“U.S. citizenship is not required for Mortgage eligibility.” Furthermore, the lender is required to, “determine the residency status of the Borrower based on information provided on the mortgage application and other applicable documentation. In no case is a Social Security card sufficient to prove immigration or work status.”
Who can apply for an FHA mortgage in these cases?
HUD 4000.1, pages 129 and 130 state:
“A Borrower with lawful permanent resident alien status may be eligible for FHA-insured financing provided the Borrower satisfies the same requirements, terms and conditions as those for U.S. citizens.” Additionally, “A Borrower who is a non-permanent resident alien may be eligible for FHA- insured financing provided:
–the Property will be the Borrowers Principal Residence;
–the Borrower has a valid SSN, except for those employed by the World Bank, a foreign embassy, or equivalent employer identified by HUD;
–the Borrower is eligible to work in the United States, as evidenced by the Employment Authorization Document issued by the USCIS; and
–the Borrower satisfies the same requirements, terms and conditions and those for U.S. citizens.”
For non-permanent resident aliens, “The Employment Authorization Document is required to substantiate work status. If the Employment Authorization Document will expire within one year and a prior history of residency status renewals exists, the Mortgagee may assume that continuation will be granted. If there are no prior renewals, the Mortgagee must determine the likelihood of renewal based on information from the USCIS.”
Additionally, “A Borrower residing in the U.S. by virtue of refugee or asylee status granted by the USCIS is automatically eligible to work in this country. The Employment Authorization Document is not required, but documentation substantiating the refugee or asylee status must be obtained.”
Lender standards may apply, and all FHA loan applicants are required to financially qualify. Standards for financial qualification may vary from lender to lender, so potential borrowers will need to have a discussion with a loan officer for more information.