As of May 25, 2025, non-permanent U.S. residents will no longer be able to apply for an FHA loan. This update to FHA loan qualifications, announced by the Federal Housing Administration (FHA) in March, affects homebuyers who aren’t U.S. citizens or lawful permanent residents, such as those with work visas.
The change is a big shift from today’s rules, which let non-permanent residents with work permits qualify for these government-backed loans. For years, FHA loans have been available to many different borrowers, including those with various immigration statuses who could prove legal residency and steady income.
Why Is This Change Happening?
The FHA has given several reasons for the policy update:
- Risk management: Immigration laws create uncertainty around non-permanent residents’ ability to remain in the U.S.
- Program focus: The FHA wants to make sure FHA resources go to permanent residents and citizens.
- Regulatory alignment: FHA loan qualifications are becoming like other federal housing programs.
This update follows restrictions already in place with some other government loans, like USDA. The FHA seems to be creating more standardization across all federal housing programs. While this might make things simpler for lenders, it creates new hurdles for non-permanent residents.
The update will mainly impact these categories of homebuyers and homeowners who are refinancing:
- People with work visas (H-1B, L-1, O-1, etc.)
- Students with F-1 visas who can legally work
- People with Temporary Protected Status (TPS)
- DACA recipients with work permits
- Other non-citizens who are legally here but don’t have permanent residency
After the change goes into effect, a permanent resident applying for an FHA loan will need to provide proof of their status through U.S. Citizenship and Immigration Services (USCIS) documents. Citizens of Micronesia, the Marshall Islands, and Palau are still eligible for FHA loans under special agreements but must meet the same requirements as U.S. citizens.
If you’re a non-permanent resident and were planning to use an FHA loan to buy a home, you’ll need to consider other loans or speed up your home purchase before the May deadline.
Can’t qualify for an FHA loan? You still have options.
Contact your local Cornerstone loan officer.
What Should You Do If You’re Currently House-Hunting?
If you’re a non-permanent resident looking for a home and were counting on an FHA loan:
- Act quickly: If you can finish the loan application process before May 25, 2025, you might still qualify under current requirements.
- Talk to a loan officer: Our local Cornerstone loan officers can look at your situation and help you navigate these changes.
- Get your paperwork ready: For any type of loan, you’ll need to prove your legal status, work authorization, and financial stability.
- Think about timing: If you’re close to getting permanent residency, it might be worth waiting to apply for an FHA loan after your status changes.
If you’re a non-permanent resident worried about the new FHA loan qualifications, you still have several mortgage options:
Conventional Loans
A conventional loan may be available to non-permanent residents with valid work permits. This loan usually requires a higher credit score than an FHA loan, but many non-citizens may qualify.
Fannie Mae and Freddie Mac Programs
These government-sponsored programs have specific offerings for non-permanent residents, including Fannie Mae’s HomeReady®, Freddie Mac’s Home Possible®, and Standard Conventional 97 loans. Both Fannie Mae and Freddie Mac generally require non-permanent residents to have a valid Employment Authorization Document (EAD) or qualifying visa types, such as E-1, E-2, H-1B, L-1, etc.
Foreign National Loans
A foreign national loan caters specifically to non-U.S. citizens, often those who may not reside in the U.S. full-time. These mortgages typically require larger down payments and extensive documentation of overseas income and assets. Due to the increased risk, the loans often come with higher interest rates.
ITIN Loans
These loans are available to homebuyers with an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number. An ITIN loan provides an opportunity for anyone who pays U.S. taxes but doesn’t have standard documentation to secure a mortgage. The loan may come with stricter requirements, such as a larger down payment and higher interest rate.
Non-QM and Portfolio Loans
Unlike FHA mortgages that must follow strict government guidelines, non-QM (non-qualified mortgage) and portfolio loans are designed to be more accommodating. These specialized loans have features—like alternative income verification and flexible visa requirements—that can help non-permanent residents.
Ask Us About Your Loan Options
Whether you’re a non-permanent resident, permanent resident, or U.S. citizen, we’re committed to helping you find the right home loan. If you have questions or want to learn more, just reach out. Cornerstone loan officers are here to help.
Sources deemed reliable but not guaranteed. For educational purposes only. Not a commitment to lend. Borrower must meet qualification criteria.