DACA Home Loans FAQ: Ten Important Questions About Loans for Dreamers
Getting a DACA home loan can seem confusing, but it’s actually quite simple.
Read through these frequently asked questions and you’ll have the information needed to move forward on your home purchase…
Frequently Asked Questions About DACA Home Loans
1. Question: “Can I get a home loan as a DACA recipient?”
If you are a DACA recipient, you can get a home loan. While certain types of loans are unavailable to Dreamers, conventional loans are an option for anyone in the country under the DACA program. When getting a conventional home loan for your purchase, you will essentially enjoy the same benefits as any applicant, including high loan limits and reasonable credit requirements.
2. Question: “As a DACA recipient, are my loan limits decreased?”
Answer: Not at all.
Using a conventional home loan as a DACA recipient, you’ll have access to the same loan limits as any U.S. citizen utilizing this form of financing. The exact amount that you have access to will depend on your income, debt-to-income ratio, credit score, and other factors, but the limit across the country is $510,400 for a single-family home. In certain high-cost areas, the limit can go as high as $765,600. (Again, not everyone will qualify for that amount, but those are the national limits.)
3. Question: “Is there a lot of paperwork on a home loan to a Dreamer?”
Answer: No, not compared to any other loan.
Compared to a typical conventional loan for a U.S. citizen, no, there is not a lot of paperwork for DACA home loans. You’ll have to prove your status as a DACA recipient, and you’ll have to go through the same application process as anyone else, but you will not find an excessive amount of paperwork with this home loan.
4. Question: “As a self-employed professional, are DACA home loans still available to me?”
Even if you are self-employed and don’t have typical paystubs and tax returns, you can still utilize this home loan. DACA recipients are under the same basic qualification standards, and you likely won’t need two-years of self-employment to qualify, as is commonly believed.
5. Question: “What Documents will I Need?”
Answer: Basic Documents on Immigration and Residency Status.
In addition to your income, credit, and debt information, DACA recipients will need to verify their status in the country, which can be done through an Employment Authorization Document, Green Card, Visa, and other information. You may also need pay stubs, employment verification, your Social Security card, or bank statements. In general, it’s best to have all of these documents ready in case they are requested by the lending agent.
6. Question: “If I (or a Dreamer family member) only speak Spanish, can I still complete an application for a home loan?”
Answer: Yes, we speak Spanish and would be happy to help with your application
If you work with our team for your DACA home loan, you can get the services of a bilingual professional who is knowledgable about the loan-application process. We are dedicated to making the application process as seamless, convenient, and clear as possible, and we are proud to offer our services to people who only speak Spanish.
7. Question: “Can I get an FHA loan?”
While federal policy is always subject to change, FHA loans are currently not available to non-citizens. The Department of Housing and Urban Development, which oversees the Federal Housing Administration (FHA), has essentially stated that their services are only designed for U.S. citizens, and they are not, according to a letter written by one of their representatives, in the business of determining citizenship. For more on this subject, please read our article about FHA loans and DACA recipients.
8. Question: “If my credit score in the U.S.A is not high, can I still get a mortgage as a Dreamer?”
When you get a conventional loan, you are subject to the same mortgage requirements as any other loan. Although requirements can vary by lender, the federal government, Fannie Mae, and Freddie Mac do not have additional requirements for using these loans beyond verifying your residency status. This means that you are subject to the same credit requirements as any other applicant.
To use a conventional loan, you need a credit score of 620 or higher in most cases. This is not an extremely low score, but it’s certainly not a high score either. Basically, requiring a 620 score or better means that most people, including DACA recipients, will qualify for the home loan.
9. Question: “A family member gave me a cash gift. Can I use this as my downpayment or mortgage fees?”
When purchasing a home, many people struggle with the downpayment requirements. In some cases, the requirements can be as high as 20% (which is extremely rare), but even a 3.5% downpayment can be difficult; at a purchase price of only $200,000, 3.5% represents $7,000.
To ease the burden, many people use cash gifts from relatives. But there are restrictions, as lenders, in general, prefer the downpayment money comes from personal savings and investments, as this shows a certain level of financial responsibility. But cash gifts can be used on conventional loans, which means DACA recipients using this program can also fund downpayments and fees with a gift.
10. Question: “I’m ready to buy a home! How can I get started?”
Answer: Get Prequalified Before Shopping for a Home
The first step in purchasing a home as a DACA recipient is to get prequalified for a conventional loan. The process is simple and easy, and getting prequalified allows you to shop for homes with greater focus and confidence.
When you are prequalified, you’ll have greater access to for-sale homes, as many sellers and seller agents only work with prequalified buyers. You’ll also have a clear idea of your overall budget, making you a more informed buyer. Whether you are a U.S. citizen or a Dreamer, getting prequalified is the first step.
Dreamers: Get a Mortgage Quickly with the FastTrack Program
Using the FastTrack program, we can help you get a mortgage loan quickly and efficiently, without sacrificing quality and affordability.
If you are ready to find your home, contact San Diego Purchase Loans today. We’ll make sure you have the right information to make a confident decision, so let us help you get prequalified today!