DACA meaning is a program created for immigrants who came to the United States when they’re still children. This program helps them to be able to live and work in the country. Those who receive assistance from the program are referred to as DREAMers because they will benefit from the program, namely development, relief, and education for underage immigrants.
Well, for you who want to join the DACA program or have relatives or acquaintances who want to move to the United States with underage status, then you need to read this article more deeply. In this article, we will provide guidelines for obtaining DACA home loans for underage immigrants coming to the United States.
Before Discussing about DACA Loans, You Must First Know What is DACA Meaning
What is DACA definition? DACA is Deffered Action for Childhood Arrivals. This is a policy made by the United States government to protect 800,000 young people or better known as DREAMers. They are people who entered as immigrants to the United States illegally while still a child or underage. Well, here are some things you should know about DACA meaning.
- Talking about DACA meaning, you should also know that this DACA program cannot give these children legal status or citizenship. However, this allows them to be able to apply for several documents such as driver’s license, social security number, and also work permit.
- The program was actually founded by Barack Obama while still serving as president in 2012. Then Donald Trump made several attempts to dismantle this program.
- Finally, a federal judge ruled that in December 2020, DACA applicants were allowed to apply for the first time after President Trump’s administration stopped accepting new application documents.
- He also gave an extension period to two years which was previously only one year.
- For additional information, in July 2021, a federal judge has ruled that applicants for the DACA program for the first time are barred from applying to the program.
- Meanwhile USCIS confirms that all persons whose DACA requirements have been approved prior to July 16, 2021 will be able to continue to have DACA status. In addition, those whose DACA requests are approved before July 16, 2021, are eligible to continue to renew their work permits.
- Not only that, the domestic court can also continue to accept the DACA application but cannot approve the initial DACA request due to the judge’s decision.
After Knowing DACA Meaning, Now is The Time for You to Know about DACA Loans
You already know DACA meaning, now you will get an explanation regarding DACA loans. As explained above, DACA recipients are immigrants who came to the USA when they were children. When they are adults, they certainly try to find a house or property, whether it is used as a place to live or as an investment for them.
Eligible recipients of the DACA program can apply for personal loans, student loans, as well as home loans. For you who are recipients of the DACA program and want to get this loan, it all depends on your profile or risk status. This is so that the lender knows how risky you are if you become a borrower.
As DACA explained above, in this article you will find guidance on how to obtain loans for people who are enrolled in the DACA program. So, how can someone with DACA buy a house? DACA recipients can qualify for a home loan, but chances are that the bank will not approve the application documents so you can use other alternative options.
One option that you can use is with a loan from the Federal Housing Administration (FHA) where this loan is designed for DREAMers. There are four requirements that must be met if you want to get this FHA loan.
- The property that is being financed must be the main residence
- Must have a valid social security number
- Must meet general loan requirements for United States citizens
- An Employment Authorization Document (EAD) from the US Citizenship and Immigration Services (USCIS) is required which will be used to prove that you have a work permit in the United States
Also make sure that you don’t try the loan, but try to find another loan from the private sector. Loans from private parties have fewer requirements and are easier although they will require a fairly large minimum credit score of around 650.
So for you DREAMers who are interested in owning a house with a loan, then you have to prepare some documents. What are the documents required by these mortgage loans for DACA recipients?
- First, of course you need a social security number
- You also need to attach expired EAD documents. This is because the lender thinks USCIS will renew your DACA status.
- Current valid EAD document.
- Also prove that you are still earning up to now, such as by attaching proof of an active account balance. This is so you can convince the lender that you can afford the loan fees to buy a house.
There are some other tips that you should know here as a recipient of the DACA program. You actually have the benefit of being able to apply for a loan even though it is complicated, but if you have a good immigration lawyer then everything will be easy. If you really can’t afford a lawyer, then you can use a service that can help you process the DACA loans application so that you can become DACA approved mortgage lenders. Don’t worry, these services are widely available in the United States, so you just have to look for the information on internet search engines or ask for recommendations from your acquaintances there.
Already Understand More about DACA Meaning? Let’s Learn about The Home Purchase Process to Get DACA Loans
Here are some points that we provide to make you understand more about the flow or process of DACA recipients to be able to get a home loan.
- First, you have to manage your finances and prepare your application documents as well as possible. Don’t let there be missing documents because it will make your application take longer to process.
- Start looking for a lender and be sure to diligently look for loan options
- You must obtain prequalification for your loan
- Then, you have to find the house you want to buy
- Make an offer
- Carry out a home inspection or assessment
There are differences between the process of providing loans to citizens in general and DACA recipients. The difference is in the second point, which is related to the loan pre-approval and application processes. Loans that are currently popular for use in buying houses are conventional loans, where these loans are not supported by the government, and one example is FHA loans.
Well, for you DACA recipients, after finding a house to buy, you can then submit a loan application to the party providing the loan. Also make sure you report your citizenship status. Some of the applications for DACA realtors that you need to prepare are as follows.
- You must have a social security number or tax ID
- You must also prepare an employment authorization document (EAD) which will help prove your current legal status or presence in the United States
- Include your employment history as well as proof of your income which includes W-2 forms, salary slips, proof of asset ownership, and bank statements
Here we also include a list of organizations that can assist DACA recipients in obtaining loans. The following organizations provide DREAMers with the resources they need to advocate them in obtaining the home loan they need.
- United We Dream (UWD): This organization is led by immigrant youth and is the largest organization in the US. This organization seeks to fully support immigrants and communities from outside the US who are exiled in the US.
- Regents of The University of California: Many University of California students are DACA recipients. Therefore, a community was formed there that offered legal aid, financial support, and other things to the DREAMers on campus.
- American Civil Liberties Union (ACLU): This non-profit organization was founded in 1920. It is very proactive in defending constitutional rights as well as individual liberties in the US. This ACLU helps maintain DACA since 2017.
- Immigrant Resource Center: This non-profit organization can provide legal training, educational assistance, and advocacy to immigrants in the US. This organization also helps immigrants in the US to process their DACA application documents.
Have You Learned More about DACA Meaning? Now You Need to Know What DACA Loans are Available?
Below are some of the loan options for buying a home that are available to DACA program recipients.
- Conventional Loans: These are standard loans provided by private parties. This loan used to be the only type of loan that DACA recipients could apply for.
- Homeready Loans: This loan is known as a Fannie Mae loan where for this loan it requires a high minimum credit score compared to other types of loans and you have to provide a fairly high down payment.
- FHA Loans: These loans offer quite competitive repayment fees compared to other loans. This loan is also very beneficial for those who do not qualify for other loans. It was recently confirmed that DACA recipients can apply for a home loan with this FHA loan.
Regarding FHA loans, there are several pros and cons of DACA lending with this FHA system. Therefore, here are some advantages if you use an FHA loan.
- Its credit score is lower than other loans. This will be very beneficial for you who used to have a bad financial history. You will be charged with a 3.5% down payment and enough with a credit score of 580 then you can apply for a loan.
- If you still do not meet the requirements as stated in the first point, then you can still join the mortgage program with smaller credit terms. But here the down payment you have to pay is 10%.
- Your premium is also not affected by your credit score. Especially if your credit score is high enough, then you don’t need to pay more loans.
- If the debt to income ratio is high, it is still allowed to apply for a loan. This is still adjusted to the loan ratio requirements that have been determined by the FHA.
Meanwhile, what are the drawbacks for DACA recipients when using this FHA loan?
- There is a mortgage insurance premium that will increase your borrowing costs. You will be charged a fee of 1.75% for this premium and you have to pay it upfront so you have to pay it along with the down payment. You also have to pay 0.85% of the loan balance each month. You can actually not take this premium, but there are other costs that you still have to pay to replace it.
- Down payment can be higher than conventional loans. Conventional loans only require 3% as a down payment, while FHA requires 3.5%.
- The loan limit is also an obstacle for this FHA loan. This is because FHA has a fairly tight loan limit and of course it can change every year and follow the flow of inflation. So make sure that you always check the latest limit. These limits may also vary by location.
Meanwhile, what properties can be borrowed using these DACA loans?
- If you are a DACA recipient, then you have unlimited options to make a home loan as long as you make a loan for your main residence. You can buy property for the type of multi-unit house, for property investment, or even for the house that you want to make as your second home.
- There is one thing you should note that if you are a DACA recipient, you cannot apply for an FHA loan for two properties at the same time.
FAQ about DACA Meaning and DACA Loans
- What makes me eligible to apply for DACA loans?
To become DACA approved mortgage lenders, you must include several documents. They are a social security card, employment document (EAD) issued by the U.S. Citizenship and Immigration Services (USCIS). You must also include C33. In addition, attach an expired EAD card to show that you have a history of residence status.
- How much do I need to pay for my mortgage?
Basically there are two costs that you have to bear. The first is the basic costs that must be paid every month and the second is the cost of closing the house. The monthly fee depends on variables such as the price of the house, the amount of the down payment, and the interest rate on the loan. Meanwhile closing costs include taxes and also other necessary closing costs. Therefore, before making DACA loans, it is important for you to calculate these costs.
