November 15, 2013
One not-so-common, but very important question for some potential FHA borrowers revolves around citizenship status. Does a borrower have to be a citizen of the United States in order to apply for an FHA home loan? Let’s examine what the FHA loan rules published in HUD 4155.1 Chapter Four Section A say about this question.
According to Chapter Four, “U.S. citizenship is not required for mortgage eligibility.
The lender must determine the residency status of the borrower, based on
- information provided on the loan application, and
- other applicable documentation. “
That is good news for people in a variety of circumstances including legal resident aliens, those who are taking citizenship tests or who are in the process of relocating to this country under certain conditions.
Chapter Four adds, “FHA insures mortgages for borrowers with lawful permanent resident alien status, using the same terms and conditions as those for U.S. citizens. “ FHA instructions to the lender include the following:
“The mortgage file must
- include evidence of the permanent residency, and
- indicate that the borrower is a lawful permanent resident alien on the Uniform Residential Loan Application (URLA). “
Furthermore, Chapter Four says non-permanent resident aliens are also eligible for FHA loans under the right circumstances:
“FHA insures mortgages made to non-permanent resident aliens provided that the
• property will be the borrower’s principal residence
• borrower has a valid Social Security Number (SSN), and
• borrower is eligible to work in the United States, as evidenced by an Employment Authorization Document (EAD) issued by the USCIS.”
FHA loan rules say loan applicants in this situation cannot use a Social Security card as evidence of work status.
One reason for this? Chapter Four points out that while, “Social Security cards may indicate work status, such as ‘not valid for work purposes’” an individual’s work status may change without the change being reflected on the actual Social Security card. For this reason, the Social Security card must not be used as evidence of work status, and the EAD must be used instead. “
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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