365 Days of Claims
Claim #252 of 365
Misleading high confidence

The claim contains elements of truth but is presented in a way that creates a false impression.

housingimmigrationFHADACAmortgagesmischaracterizationPRWORAmanufactured-problem

The Claim

Canceled taxpayer-backed mortgages for illegal immigrants.

The Claim, Unpacked

What is literally being asserted?

That the administration canceled government-backed (FHA-insured) mortgages that were being provided to undocumented immigrants (“illegal immigrants”), thereby ending a misuse of taxpayer resources.

What is being implied but not asserted?

The claim implies that undocumented immigrants were routinely obtaining FHA-insured mortgages — that a meaningful population of people without legal status were accessing a taxpayer-backed homeownership program, and the administration stepped in to stop this abuse.

What is conspicuously absent?

The claim omits: (1) that undocumented immigrants were already ineligible for FHA-insured loans under existing law and had been since the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA); (2) that the actual policy change eliminated the “non-permanent resident” category, which primarily affected DACA recipients, asylum seekers, refugees, and H-1B visa holders — people with legal authorization to live and work in the United States; (3) that the FHA does not collect citizenship or residency data and therefore has no evidence of how many, if any, undocumented immigrants ever obtained FHA-insured loans; (4) that the policy being reversed was originally established under Trump’s own first-term FHA Commissioner, Brian Montgomery, on January 19, 2021; and (5) that ITIN mortgages used by undocumented immigrants are private loans, not government-backed.

Evidence Assessment

Established Facts

HUD issued Mortgagee Letter 2025-09 on March 26, 2025, eliminating the “non-permanent resident” category from FHA eligibility. The letter, effective May 25, 2025, restricts FHA-insured mortgage eligibility to U.S. citizens, lawful permanent residents, and citizens of the Freely Associated States (Federated States of Micronesia, Republic of the Marshall Islands, Republic of Palau). This eliminates eligibility for DACA recipients, pending asylum applicants, pending refugees, and H-1B visa holders. 1

Undocumented immigrants were already ineligible for FHA-insured loans under existing federal law. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) bars unauthorized noncitizens from virtually all federal public benefits, which the law defines to include loans. FHA’s own handbook required borrowers to demonstrate lawful residency status. The Congressional Research Service report R46462 confirms that undocumented immigrants did not qualify for FHA-insured mortgages. 2

The FHA does not collect or retain citizenship or residency data from loan applications. HousingWire and other mortgage industry outlets confirmed that the FHA has no records indicating how many non-permanent residents received FHA loans under past policies, let alone how many undocumented immigrants may have improperly accessed the program. There is no data supporting the premise that this was a significant — or even existing — problem. 3

The “non-permanent resident” FHA category was not created by the Biden administration. The category existed for decades. The most recent policy change before 2025 was the Trump administration’s own decision: on January 19, 2021 (the last day of Trump’s first term), FHA Commissioner Brian Montgomery posted FHA INFO #21-04, explicitly permitting DACA recipients to apply for FHA-insured mortgages. The Biden administration’s Mortgagee Letter 2021-12 (May 2021) codified and clarified Montgomery’s waiver. 4

Non-permanent resident borrowers accounted for approximately 2.8% of all FHA loans in 2024. Mortgage industry data indicates this was a small share of total FHA originations. These borrowers included DACA recipients with valid SSNs and work authorization, refugees, asylees, and visa holders — all lawfully present in the United States. 5

HUD and DHS signed the “American Housing Programs for American Citizens” MOU on March 24, 2025. Two days before the FHA policy change, HUD Secretary Scott Turner and DHS Secretary Kristi Noem established a data-sharing agreement to identify undocumented immigrants in federally subsidized housing and refer them for immigration enforcement. HUD assigned one full-time staffer to the effort. The MOU raised significant privacy concerns among housing advocates and members of Congress. 6

Strong Inferences

The policy change primarily affects lawfully present immigrants, not “illegal immigrants.” Since undocumented immigrants were already excluded from FHA loans, the practical effect of Mortgagee Letter 2025-09 falls on DACA recipients (approximately 530,000 people with work authorization and Social Security numbers), asylum seekers with pending applications, refugees, and visa holders. These are people with legal authorization to be in the United States. The framing as targeting “illegal immigrants” mischaracterizes who is actually affected. 7

ITIN mortgage loans — the actual lending mechanism available to undocumented immigrants — are private, not taxpayer-backed. The Urban Institute reported that approximately 5,000-6,000 mortgage loans were made to ITIN holders in 2023. These are originated by private lenders, carry higher interest rates and larger down payments (15-30%), and are not insured by the FHA, guaranteed by the VA, or backed by Fannie Mae or Freddie Mac. They are not “taxpayer-backed” in any sense. 8

The administration’s framing creates a manufactured problem narrative. By describing the action as “canceling taxpayer-backed mortgages for illegal immigrants,” the claim implies an existing abuse was being remedied. But the FHA’s own inability to identify any such loans, combined with the pre-existing legal prohibition under PRWORA, suggests the “problem” being solved did not exist in any meaningful scale. The policy change instead restricts access for lawfully present people while generating political messaging about cracking down on undocumented immigrants. 9

What the Evidence Shows

The administration took a real policy action — eliminating the non-permanent resident category from FHA eligibility via Mortgagee Letter 2025-09. This is a documented, verifiable change. But the White House’s description of what happened bears little resemblance to the actual policy or its effects.

Undocumented immigrants were already barred from FHA-insured loans by federal law since 1996. The FHA does not even collect citizenship data, so there is no evidence base for claiming that undocumented immigrants were accessing these loans. The people actually affected by the policy change are DACA recipients, asylum seekers, refugees, and visa holders — all lawfully present individuals who previously qualified under a category that existed for decades and was most recently affirmed by Trump’s own first-term FHA Commissioner.

The claim also conflates private ITIN mortgages — the actual mechanism through which some undocumented immigrants obtain home loans — with government-backed FHA loans. ITIN loans are issued by private lenders at higher rates with no government backing. The 5,000-6,000 annual ITIN loans represent a vanishingly small share of the 6+ million annual U.S. mortgage originations, and none of them are “taxpayer-backed.”

This follows a pattern seen across multiple items in the “365 wins” list (items 21, 23, 51, 251): the administration describes enforcement actions against undocumented immigrants accessing federal benefits, when the actual policy changes primarily affect lawfully present immigrants, and the claimed pre-existing abuse either did not exist or cannot be documented.

The Bottom Line

The administration did issue a real policy change restricting FHA loan eligibility. But describing it as “canceling taxpayer-backed mortgages for illegal immigrants” is misleading on multiple levels. Undocumented immigrants were already ineligible for FHA loans under federal law dating to 1996. The FHA has no data showing undocumented immigrants obtained these loans. The people actually affected are lawfully present individuals — DACA recipients, refugees, asylum seekers, and visa holders. And the non-permanent resident category being eliminated was most recently affirmed by Trump’s own first-term FHA Commissioner. The claim presents the solution to a manufactured problem while obscuring that the real-world impact falls on people who were legally authorized to be in the country.

Footnotes

  1. HUD, “HUD Cracks Down on Government-Backed Mortgages for Illegal Immigrants,” Press Release HUD-No-25-048, March 26, 2025. https://www.hud.gov/news/hud-no-25-048; HUD, Mortgagee Letter 2025-09, March 26, 2025. https://www.hud.gov/sites/default/files/OCHCO/documents/2025-09hsgml.pdf ↩

  2. Congressional Research Service, “Noncitizen Eligibility for Federal Housing Programs,” Report R46462. https://www.congress.gov/crs-product/R46462; Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Title IV. ↩

  3. HousingWire, “FHA restricts loan eligibility to US citizens and permanent residents,” March 26, 2025. https://www.housingwire.com/articles/fha-restricts-loan-eligibility-to-us-citizens-permanent-residents/ ↩

  4. HUD, “FHA INFO #21-04: FHA to Permit DACA Recipients to Apply for FHA Insured Mortgages,” January 19, 2021. https://www.hud.gov/sites/dfiles/SFH/documents/SFH_FHA_INFO_21-04.pdf; Gary Acosta, “Brian Montgomery, not Joe Biden is the reason DACA Recipients are FHA Eligible,” GaryAcosta.com. https://garyacosta.com/housing/brian-montgomery-not-joe-biden-reason-daca-recipients-fha-eligible/ ↩

  5. Supreme Lending, “FHA Changes for Non-Permanent Residents,” 2025. https://blog.supremelending.com/fha-changes-for-non-permanent-residents-what-you-need-to-know-and-why-its-not-the-end-of-the-road/ ↩

  6. HUD, “HUD Secretary Scott Turner, DHS Secretary Kristi Noem Establish Partnership to End Illegal Alien Exploitation of Housing Programs,” Press Release HUD-No-25-046, March 24, 2025. https://www.hud.gov/news/hud-no-25-046; NPR, “HUD will share data with Homeland Security to target immigrants without legal status,” March 26, 2025. https://www.npr.org/2025/03/26/nx-s1-5339689/hud-will-share-data-with-homeland-security-to-target-immigrants-without-legal-status ↩

  7. HousingWire, “What the FHA’s new eligibility policy means for immigrant homebuyers,” March 2025. https://www.housingwire.com/articles/fha-loan-eligibility-non-permanent-residents-hud-nahrep-gary-acosta/; Daughtrey Law, “Impacts of HUD’s Policy Change on FHA Mortgage,” March 27, 2025. https://daughtreylaw.com/2025/03/27/new-hud-fha-rule-shuts-out-immigrant-buyers/ ↩

  8. National Mortgage Professional, “Undocumented, But Not Unmortgageable,” May 4, 2025. https://nationalmortgageprofessional.com/news/undocumented-not-unmortgageable-05042025 ↩

  9. Democracy Forward, “Records Reveal Trump’s HUD Broke Federal Law With Secret Policy Denying DACA Recipients Federal Home Loans and Misled Congress About Policy Change.” https://democracyforward.org/news/press-releases/records-reveal-hud-secret-policy-denying-daca-fha-home-loans-misled-congress/ ↩