The Trump administration violated federal law by unlawfully implementing a secret policy to deny DACA recipients federally-backed housing loans. Following President Trump’s failed attempt to terminate the DACA program, the Department of Housing and Urban Development determined — contrary to its historical practice — that DACA recipients do not meet the “lawful residency” requirement for Federal Housing Administration (FHA) loans.

HUD reached this conclusion despite the fact that USCIS acknowledges that DACA recipients are lawfully present in the country. The policy change was distributed internally through nonpublic November 2018 agency guidance.

The unacknowledged, unlawful decision to deny DACA recipients federal home loan eligibility hurt both recipients and lenders and created uncertainty in the home mortgage market. Borrowers who anticipated being able to rely on federal backing to buy a house were denied, often after spending significant time and effort proceeding through the loan application process. And lenders, which had operated based on the reasonable and good faith understanding that DACA recipients were eligible for FHA loans, based on HUD’s prior actions, were forced to execute indemnification agreements for loans that defaulted.

Internal emails we obtained showed that HUD understood that its failure to state its view on eligibility explicitly and publicly caused confusion.

(Attachment 6)


While HUD staff had drafted an FAQ for the public explaining its new view on DACA eligibility, which OGC had approved by at least early May 2018, it was never published.

(Attachment 30)


HUD staff expressed frustration that senior leadership would not “post the freaking DACA FAQ,” which would have made the department’s policy clear and public.

(Attachment 1)


HUD also gave misleading answers to Congress about the policy change. In late 2018 and into 2019, following news reports that HUD was informally excluding DACA recipients from FHA loans, HUD officials maintained to Congress that HUD had not changed any such policies, while emails revealed staff was well aware of its lack of transparency.

When several Senators (Sens. Menendez, Booker, Cortez Masto) and Representatives pressed HUD in December 2018, Secretary Ben Carson and other officials — including Assistant Secretary Len Wolfson and FHA Commissioner Brian Montgomery — claimed they weren’t aware of any policy change “either formal or informal.” In 2019, Rep. Pete Aguilar pressed HUD again to provide answers about the reported change in policy and received HUD’s response in June, which stated for the first time in writing, that DACA recipients lack eligibility for FHA-backed loans. That position was reiterated in a July 2019 response to a letter led by Rep. Juan Vargas.

“It was an administrative trainwreck — and yet another example of what happens when the Trump administration’s disregard for immigrants and inability to govern collide.”

– Robin Thurston, Democracy Forward Senior Counsel

We submitted over 150 pages of internal HUD records to HUD’s Inspector General with a request for an investigation. These documents show how the agency’s haphazard, nonpublic implementation of its DACA exclusion policy violated statutory requirements for agency decision-making, hurt HUD’s credibility, and created uncertainty in the home mortgage market. Based on the documents we obtained, bicameral members of Congress have also announced a request for investigation into HUD actions.


Following the Administration’s attempt to rescind DACA in late 2017, lenders and officials at HUD began asking whether DACA recipients were eligible for FHA loans.

April 2018

After getting inquiries about DACA recipient eligibility, a HUD official asked others working on FHA single-family housing programs, “[c]an you provide guidance here? The FHA Handbook isn’t clear on this. Do we need to update the Handbook?”

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May 2018

HUD had drafted an FAQ for the public explaining its view on DACA eligibility as early as May 2018, but the FAQ was never published.

One internal email exchange from December 2018 shows a senior HUD official “decided that it should not be published.”

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July 2018

FHA Administrator Montgomery received an email regarding HUD’s interpretation of its “lawful residency” requirement and the conclusion that DACA recipients were ineligible.

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December 2018

Montgomery later asked for a meeting on the matter because “it comes up all the time” and was in possession of the draft FAQ on the policy change by December 2018.

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August 2018

During an internal FHA policy call, HUD staff were instructed to apply the new “lawful residency” interpretation by excluding loan applicants who have work permits that contain an employment code reserved for DACA recipients.

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November 2018

That instruction was codified in November 2018 agency guidance.

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February 2019

FHA Administrator Brian Montgomery told a House subcommittee there was no change in policy despite having been notified that HUD had, indeed, formally interpreted its Handbook to bar DACA recipients from receiving FHA loans for the first time and had begun enforcing that change.

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April 2019

HUD Sec. Carson testified before the House subcommittee that it would “surprise” him if DACA recipients were being turned away.

He’d “inquired of the appropriate people, including the FHA commissioner, and no one was aware of any changes that had been made to the policy whatsoever.”

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Records, however, suggest he spoke with Montgomery in the prior fall about the Department’s instructions to lenders to exclude DACA recipients.

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May 2019

Rep. Pete Aguilar pressed for answers about the reported change in policy.

He received a June 2019 response where HUD announced, for the first time in writing, that DACA recipients lack eligibility for FHA-backed loans.

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July 2019

That position was reiterated in a response to a letter led by Rep. Juan Vargas.

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Robin Thurston

Deputy Legal Director

Litigating challenges to unlawful actions, abuses of power, and threats to democracy on behalf of those who are harmed.

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Michael Ceja Martinez

Managing Senior Counsel

Challenging unlawful actions involving the environment, consumer protection, occupational safety standards, and more.

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