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As the Trump administration aligns government policies with its priorities on broader issues, the Federal Housing Administration (FHA) on Wednesday published new guidance that directs all FHA loan programs to implement a U.S. citizenship or permanent residency requirement.
The guidance in two documents — ML 2025-09 and TI Letter 490 — applies to Title I Property Improvement and Manufactured Home Loan programs, as well as all Title II loan programs and Home Equity Conversion Mortgages (HECMs), which are FHA-backed reverse mortgages. The guidance can be implemented immediately, but it must be implemented for all FHA case numbers assigned on or after May 25.
The agency explained that it was implementing these requirements to align with recent executive orders issued by President Donald Trump. On Feb. 19, he signed an order to end what the White House called the “taxpayer subsidization of open borders.”
“The administration has reaffirmed its commitment to safeguarding economic opportunities for U.S. citizens and lawful permanent residents while ensuring that federal benefits, including access to FHA-insured Mortgages, are reserved for individuals who hold lawful permanent resident status,” the ML reads in part.
“Currently, non-permanent residents are subject to immigration laws that can affect their ability to remain legally in the country. This uncertainty poses a challenge for FHA as the ability to fulfill long-term financial obligations depends on stable residency and employment.”
Current regulations require mortgage lenders to assess a borrower’s ability to “sustain long-term financial commitments,” but they do not currently address “noncitizen eligibility for FHA loans,” according to the ML.
Putting a finer point on the full guidance across Title I and Title II programs, the FHA explained that “the updated residency requirements will remove eligibility for illegal aliens from accessing FHA-insured mortgages by eliminating in its entirety the ‘non-permanent residents’ category in both the Single Family Title I and Title II programs.”
In the Title I letter, the guidance details that “FHA does not collect citizenship or residency data from the loan application and therefore does not maintain information on the number of non-permanent residents who have received FHA-insured loans under past policies.”
“This update ensures that FHA’s loan insurance programs are administered in accordance with administration priorities while fulfilling its mission of providing access to homeownership.”
Previously, FHA-backed loans were available to non-permanent resident aliens if they were residing in the U.S. with work authorization.
In 2019, the first Trump administration moved to deny mortgages to recipients of the Deferred Action for Childhood Arrivals (DACA) program. An FHA official said at the time that “because DACA does not confer lawful status, DACA recipients remain ineligible for FHA loans.”
But on its final day in office, the first Trump administration announced it would permit FHA mortgages for DACA recipients.
ML 2021-12, issued in May 2021 under the Biden administration, clarified the availability of FHA mortgage financing for participants in the DACA program. It also detailed FHA’s prior “longstanding” policies governing loan availability for non-permanent residents.
