Updates on FHA Changes to Residency Requirements for Program Eligibility
Issue Date: April 14, 2025
On March 26, the Federal Housing Administration (FHA) issued Mortgagee Letter (ML) 2025-09, and Title I Letter (TIL) TIL-490, revising the residency requirements for program participants. Specifically, FHA is removing the eligibility of “non-permanent residents” from the Title I Property Improvement and Manufactured Home Loan, Title II Single Family, and Home Equity Conversion Mortgage (HECM) programs by May 25, 2025. Per FHA, the changes align with President Trump’s call to prioritize benefits for U.S. citizens and lawful permanent residents. FHA also states the changes ensure program integrity because “non-permanent residents are subject to immigration laws that can affect their ability to remain legally in the country,” which “poses a challenge for FHA as the ability to fulfill long-term financial obligations depends on stable residency and employment.”
NAR engaged with FHA to evaluate the effects of these policy changes on current and prospective borrowers. FHA did not elaborate on how many non-permanent residents have participated or currently participate in these FHA programs as it does not collect residency information. Under the new policy, only U.S. citizens and non-citizens with lawful permanent resident status (commonly referred to as green card holders) are eligible for FHA programs come May 25th. Non-permanent resident borrowers that previously qualified and already have an FHA-insured mortgage will not be eligible for future FHA transactions, including non-credit qualifying streamline refinance transactions.
NAR will continue to monitor these policy changes.