Homeownership is a significant milestone, and for DACA recipients—often referred to as Dreamers—it may seem like a difficult goal to reach. Deferred Action for Childhood Arrivals (DACA) is a program that allows certain individuals brought to the U.S. as children to work legally and defer deportation, but it doesn't provide a clear path to citizenship.

Despite this, DACA recipients can still qualify for mortgages and buy homes, though the process requires understanding some unique rules and requirements.

This comprehensive guide will walk you through what you need to know about DACA mortgages, including eligibility, types of loans, and how to successfully navigate the process.

Can DACA Recipients Get a Mortgage?

Yes, DACA recipients can get a mortgage.

While there is no special "DACA mortgage," DACA recipients can qualify for many of the same mortgage products available to U.S. citizens and permanent residents. However, some lenders have different requirements, and not all lenders accept DACA recipients. It’s essential to understand the qualifications and the best loan types for your situation.

Eligibility Requirements for DACA Mortgages

1. Valid Employment Authorization Document (EAD): The most important requirement for DACA recipients seeking a mortgage is having a valid Employment Authorization Document (EAD). This document is proof that you’re legally authorized to work in the U.S., and lenders will require this as part of the loan process.

2. Stable Employment and Income: Like any borrower, DACA recipients need to show that they have a steady income and stable employment. Most lenders will ask for recent pay stubs, tax returns, and proof of employment. A consistent job history can help make your mortgage application stronger.

3. Credit History: A good credit score is essential for securing a mortgage with favorable terms. DACA recipients should aim to maintain a strong credit profile by paying bills on time, keeping debt low, and regularly monitoring their credit score. The higher your score, the more options you’ll have.

4. Down Payment: Most loans require a down payment. Conventional loans often require a minimum down payment of 5%, while FHA loans (backed by the Federal Housing Administration) allow down payments as low as 3.5%. The more you can save for a down payment, the more attractive you’ll be to lenders.

5. Debt-to-Income Ratio (DTI): Lenders look at your debt-to-income ratio (DTI), which is the percentage of your income that goes toward paying off debts. A lower DTI is ideal, and most lenders prefer a DTI below 43%, though this can vary depending on the loan.

Types of Mortgages Available to DACA Recipients

DACA recipients can qualify for several mortgage options, just like other homebuyers. Some of the most popular options include:

1. Conventional Loans: These are standard mortgage loans not insured by the government. They usually require a higher credit score and a larger down payment but often come with lower interest rates. DACA recipients can qualify for conventional loans with the right documentation and financial profile.

2. FHA Loans: FHA loans are popular among first-time homebuyers because of their lower down payment requirements and more lenient credit score thresholds. DACA recipients with valid EADs can apply for FHA loans, which are backed by the Federal Housing Administration.

3. Non-QM Loans: Non-Qualified Mortgages (Non-QM) are for borrowers who may not meet traditional mortgage guidelines. These loans can be more flexible with income documentation or credit history but often come with higher interest rates.

Tips for DACA Recipients Seeking a Mortgage

1. Shop Around for Lenders: Not all lenders work with DACA recipients, so it’s essential to find a lender familiar with DACA requirements. Do your research to find lenders that accept EAD as proof of legal work status.

2. Improve Your Credit: If your credit score needs improvement, take steps to boost it before applying for a mortgage. Pay bills on time, reduce debt, and check your credit report for errors.

3. Save for a Larger Down Payment: While there are options for lower down payments, having a larger one can increase your chances of approval and help you secure better loan terms.

4. Stay on Top of Your Employment Authorization: Make sure your EAD is current and valid during the mortgage application process. An expired EAD can result in delays or denial of your loan application.

5. Get Pre-Approved: Before starting your home search, consider getting pre-approved for a mortgage. This process helps you understand how much you can borrow and shows sellers that you’re a serious buyer.

Common Challenges and Solutions

While DACA recipients can get mortgages, they may face unique challenges along the way. Here are a few potential hurdles and how to overcome them:

1. Limited Lender Options: Some lenders do not work with DACA recipients. The solution is to find lenders that specifically state they accept EADs and work with non-permanent residents.

2. Higher Down Payment Requirements: In some cases, lenders may require a higher down payment from DACA recipients. To overcome this, focus on saving as much as possible before applying for a mortgage or explore FHA loans with lower down payment requirements.

3. Verification Delays: DACA recipients may face additional verification steps, such as proving EAD status or work history. Be prepared with all necessary documentation and start the process early to avoid delays.

Owning a home is within reach for DACA recipients, but it requires careful planning, documentation, and preparation. By understanding the eligibility requirements, exploring your loan options, and working with the right lender, you can successfully navigate the mortgage process and achieve your goal of homeownership. With the right strategy, Dreamers can turn their dream of owning a home into a reality.