FHA Eliminates Eligibility of Certain Non-Permanent Residents for FHA-Insured Loans

On March 26, 2025, FHA issued Title I Letter 490, and Mortgagee Letter 2025-09, which eliminate the eligibility of certain Non-Permanent Residents for FHA-insured loans.

The letters require Mortgagees to determine the residency status of the borrower based on information in the loan application and other applicable documentation and provide that the individuals who may be eligible for FHA-insured loans are: (i) U.S. citizens, (ii) Permanent U.S. residents, and (iii) citizens of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau.  The letters continue to provide that a Social Security card is not sufficient to prove immigration or work status.

The provisions of these letters may be implemented by Mortgagees immediately, but must be implemented for FHA case numbers assigned on or after May 25, 2025.