Fannie Mae Issues Guidelines for Non-Citizen Borrowers, Including DACA
MBA NewsLink Staff
Fannie Mae, Washington, D.C., on Mar. 22 posted Fact Sheet clarifying how to determine eligibility for non-citizen borrowers, including immigrants who participate in the Deferred Action for Childhood Arrivals (DACA) program, known as "Dreamers."
The Fact Sheet (https://www.fanniemae.com/content/fact_sheet/non-citizen-borrower-eligibility.pdf) addresses issues regarding how to determine and document "lawful presence" for non-citizen borrowers, including for DACA recipients.
Under the guidelines, Fannie Mae considers a borrower legally present in the United States if:
--He/she has a valid Social Security Number or Individual Taxpayer Identification Number; and
--He/she has current, verified status, which may be documented by a valid employment authorization document, or other documentation showing immigration status is current (e.g., Green Card, work visa, etc.).
"We're not changing our existing policies, but providing additional guidance to help lenders determine eligibility for non-U.S. citizen borrowers," Fannie Mae said. "We have a longstanding policy on eligibility for non-U.S. citizen borrowers. Fannie Mae purchases and securitizes mortgages to non-citizens who are lawful permanent or non-permanent residents of the United States under the same terms available to U.S. citizens."
The Fact Sheet notes DACA recipients receive an Employment Authorization Document when they obtain or renew their status indicating that they are in category C33, a document that is effectively a work permit. In addition, many DACA recipients already have ITINs, and can apply for SSNs when they receive their EAD.
Fannie Mae said a borrower who is legally present under the Selling Guide must meet all other applicable underwriting and eligibility requirements for the loan to be eligible for sale to Fannie Mae, including continuity of income requirements that apply to all borrowers:
"Lenders retain discretion as individual borrower situations differ," Fannie Mae said. "Lenders can continue to decide what type of documentation is appropriate and what can be retained as part of the loan file to show that a borrower is legally present."
Fannie Mae added that with all its policies, subsequent changes to the law and its application "may cause us to reevaluate our policy on this matter prospectively."
Pete Mills, Senior Vice President of Member Engagement and Residential Policy with the Mortgage Bankers Association, noted importantly, for loans that meet Fannie Mae's documentation and eligibility requirements, the Fact Sheet says that Fannie Mae "will not seek a loan repurchase solely based on a change in the borrower's immigration status after closing."
Mills added MBA expects Freddie Mac to follow shortly and MBA will continue to urge FHA to follow the same framework.