Asked directly by a member of Congress about whether the Federal Housing Administration is backing mortgages for Deferred Action for Childhood Arrivals recipients or not, Department of Housing and Urban Development Secretary Ben Carson said Wednesday that HUD’s policies on FHA loans for Dreamers have not changed, but what Carson didn’t say spoke volumes.
Carson appeared Wednesday before the House Appropriations Committee’s Subcommittee on the Departments of Transportation, and House and Urban Development, and Related Agencies to discuss HUD’s 2020 budget proposal.
During Carson’s testimony, Rep. Pete Aguilar, D-Calif., asked Carson point blank about whether DACA recipients are eligible for FHA loans, but given the opportunity to end the questions about whether the FHA is backing DACA mortgages, Carson instead simply said that HUD’s polices have not changed, which is exactly what HUD told HousingWire last month despite ongoing confusion in the mortgage industry.
Carson’s comments to Congress were first reported by BuzzFeed News.
Aguilar asked Carson a three-part question, and Carson answered only one piece of it, choosing not to answer definitively on whether Dreamers are eligible for FHA loans.
“To your knowledge, are DACA recipients eligible for FHA-backed loans and has HUD made any changes to existing policy or interpretations?,” Aguilar asked Carson.
Each piece of that question is important as each part deals with a different issue.
First, whether DACA recipients are eligible for FHA-backed loans. Second, whether HUD has made any changes to its existing policy. And third, whether HUD has made any changes to its interpretations to its existing policy. And the interpretations to the policy is the key here.
As Dani Hernandez previously detailed for HousingWire, DACA recipients were previously eligible for FHA insurance under certain circumstances, but that was under a different administration that had different interpretations of the policies in question.
Now, it appears that things have changed, although HUD says its policies have not.
Carson’s response to Aguilar’s question only dealt with the part of the question on whether there had been changes to FHA/HUD policy, leaving the other two pieces of Aguilar’s question unanswered.
“Yeah, when I read that report, I inquired of the appropriate people, including the FHA commissioner, and no one was aware of any changes that had been made to the policy whatsoever,” Carson said of the FHA policy on DACA. "I’m sure we have plenty of DACA recipients who have FHA mortgages," Carson added. But, of course, that refers to Dreamers with existing FHA loans, not whether they can get new ones.
The report he’s referring to is the Buzzfeed News follow-up to a story first covered by HousingWire in September. Back in September, Hernandez wrote that HUD was quietly denying FHA mortgage insurance for DACA recipients. Both Hernandez and Buzzfeed wrote that HUD personnel have told some lenders that Dreamers are no longer eligible for FHA mortgages.
Additionally, in the wake of HousingWire’s recent reporting, numerous lenders reached out and said that they’ve also been told directly by a HUD representative that DACA recipients are no longer eligible for FHA mortgages.
HousingWire subsequently investigated and found 12 different lender bulletins or guidelines that each stated that Dreamers are ineligible for FHA financing.
In response to questions, HUD told HousingWire last month that there have been no changes to its policies. Carson reiterated that in response to Aguliar’s question, stating that HUD polices have not changed.
But Carson neglected to answer the part of his question about whether Dreamers are actually eligible for FHA mortgages or whether HUD’s interpretations of its policies are now different, as many lenders now think.
Asked by Aguilar if Carson would be “surprised” to hear that mortgage industry participants have been told by HUD personnel that its DACA policies have changed, Carson said: “That would surprise me.”
Carson added that he’s told HUD personnel to follow the laws currently on the books.
“I would simply say that I have instructed everyone to laws of the United States, with regard to DACA, with regard to anyone who is an immigrant or potential immigrant to this country,” Carson said. “And as long as you continue to follow the laws, it will have my approval.”
Asked by Aguilar if it is “possible” that someone outside of Carson’s department gave that guidance to the industry, Carson said: “When you say is it possible? Of course it’s possible. Certainly, no one who is authorized by us.”
Despite that, lenders still claim they are being told that the FHA will not back mortgages for DACA recipients. And because of that, numerous lenders are no longer doing FHA mortgages for Dreamers.
To see Carson’s responses to Aguilar’s questions, click on the video below. Aguilar’s DACA questions begin around the 1:11:15 mark of the video.
