Owning a home now easier for immigrant ‘Dreamers’ with change in FHA policy

TAMPA — Almost overnight, Cristhian Guzman saw his fortunes change.

The 28-year-old immigrant from Mexico had been trying for five years to get a loan so he, his wife Gloria and their two youngest children could move into their own home.

Guzman was brought to the United States illegally by his parents but became a legal resident under the Deferred Action for Childhood Arrivals program. Still, even as a so-called “Dreamer,” he didn’t qualify for a loan through the Federal Housing Administration.

“It was disappointing,” Guzman said.

That changed Jan. 19, the day before President Joe Biden took office, when the FHA announced a change in policy extending eligibility to Dreamers who apply for home loans. Guzman and his wife were soon approved.

The sudden shift reflects a contrast in approaches toward immigration by the Biden and Trump administrations.

Trump sought to restrict immigration overall and took steps to eliminate the deferred action program. Dreamers did not qualify for home loans because of how the FHA interpreted a 2003 passage from its Single Family Housing Handbook: “Non-US citizens without lawful residence in the United States are not eligible for FHA-insured mortgages.”

Now, the agency takes a different view of “lawful residency,” saying on its latest forms that the handbook “did not anticipate a situation in which a borrower might not have entered the country legally, but nevertheless be considered lawfully present.”

FHA mortgages, backed by the federal government, make it easier for middle-class and low-income people to buy a home. The government guarantee means banks and financial institutions are more willing to offer FHA loans to families with lower credit scores or smaller down payments — as little as 3.5 percent.

Immigrants in the deferred action program must meet all FHA requirements — a valid Social Security Number, a permit to work in the country, and certifying that the home will be a primary residence.

The Guzmans used their loan to buy a $250,000 four-bedroom home in Apollo Beach, paying $15,000 for a down payment and closing costs.

“We finally felt safe and calm,” said Gloria Guzman, 27. “It has been a long road but it’s a relief to have a home of your own and build a future for our family.”

Cristhian Guzman is head chef at an Italian restaurant in Largo. He was 1 when he came with his parents from the Mexican state of Guerrero because of unrest and a struggling economy. He was accepted into the deferred action program in 2013. Gloria Guzman, born in the United States, works as a bilingual customer service representative at Humana health.

Introduced during the Obama administration, the deferred action program allows certain undocumented immigrants brought to the United States as children before 2007 to stay here legally. They can apply for renewable, two–year work permits that protect them from deportation. It provides recipients a Social Security number and enables them to work legally.

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The program provides no path to citizenship for the estimated 800,000 people under its protection, but Biden hopes to change that. He is asking Congress to make Dreamers eligible for green cards as permanent residents and to allow them to seek citizenship after three years.

Nanci Palacios, another deferred-action program participant, also welcomes the opportunity to get a home loan.

Palacios, 31, came to the United States at age 6. For the last eight years, she has been the deputy director of Faith in Florida, a nonprofit that helps immigrants and others living in poverty. She lives with her parents in Dover after seeing her home loan applications rejected again and again because of her immigration status.

“I have a stable job with a good salary, and even so the bank did not consider me for a loan,” Palacios said.

Now, with the change in FHA policy, she may apply again.

“The rents are very expensive, for something that will never be mine,” she said.

Eliana Moran, 32, who came with her parents from Matamoros, Mexico, at age 5, is also in the deferred action program. So is her husband, Miguel, 34, who was born in Ecuador. They have two U.S.-born children.

The couple applied for an FHA loan a couple of weeks ago.

“We pray day and night that all of this ends as happy news, but we’ll see what they tell us. We have put a lot of effort and dedication to improve our situation,” Eliana Moran said. “I think this is the moment.”

Kenneth Benitez-Aulet, a loan officer for Paramount Residential Mortgage Group in Tampa, also welcomes the expansion of FHA loans to Dreamers — as a boost for the local real estate market and to help the thousands of participants realize the American dream of home ownership.

“I have DACA recipients who are asking about it,” Benitez-Aulet said. “Most of them enjoy stability in their lives and work, like any other family. This is a real opportunity for all of them.”

Homeownership helps build strong, stable communities in a number of ways, according to FreddieMac, the government-backed operator of the nation’s secondary mortgage market. It generates taxes, increases volunteerism, improves health, and even cuts down on crime.

Dreamers pay some $8.8 billion in taxes annually and contribute to the economy of their communities — even more so when they own homes, according to a 40-state survey in 2019 by the U.S. Immigration Policy Center at the University of California.

At least 14 percent of survey respondents purchased their first home after being accepted into the deferred action program. Among respondents 25 years and older, the figure was 19 percent. This has led to job creation and new spending, the survey said.

“These effects come on top of the combined $8.8 billion in federal, state, and local taxes paid annually by households with DACA recipients,” according to the survey.

Joshua Contreras, 23, of Clearwater, who entered the deferred action program in 2012, said he has always dreamed of buying a home. He hopes the opportunity is extended someday to all the estimated 11 million people living in the country illegally as leaders in Washington take up comprehensive immigration reform.

Said Contreras, “We deserve the same opportunities to own a home like anyone else.”