October 12, 2011
A recent reader question raised an interesting issue; does an FHA loan applicant have to be a U.S. citizen in order to qualify for the loan?
According to FHA rules, “Permanent Resident Aliens are eligible for an FHA-insured mortgage under the same terms as US citizens.” The FHA also adds, “ Non-Permanent Resident Aliens are eligible for FHA-insured mortgages provided the property will be the borrower’s principal residence, they have a valid social security number, and the borrower is eligible to work in the US.”
How does the lender get evidence showing that a borrower is able to be approved for an FHA mortgage in these cases? The FHA rules say “Evidence of residency and work status should be obtained from the U.S. Citizenship Immigration Services (USCIS). Eligibility to work in the U.S. can be evidenced by an Employment Authorization Document (EAD) issued by USCIS.”
The rules also state that if temporary residency status is set to expire within one year, it’s safe for the lender to assume a renewal will be granted if there’s a history of past renewals. If there are no prior renewals, “the lender must document the likelihood of renewal through the USCIS or other appropriate sources” according to the FHA official site.
Unfortunately, Social Security cards can’t be used as evidence of work status. “Although social security cards may indicate work status, such as ‘not valid for work purposes,’ an individual may become eligible to work without the change being reflected on the actual social security card”. The VA rules require all borrowers to have a valid SSN in order to qualify for an FHA home loan.
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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