The U.S. Department of Housing & Urban Development (HUD) has issued Mortgagee Letter 2025-09, “Revisions to Residency Requirements,” stating that non-permanent residents will no longer be eligible for Federal Housing Administration (FHA)-insured mortgages.
According to the Mortgagee Letter, “This update aligns FHA’s requirements with recent executive actions that emphasize the prioritization of federal resources to protect the financial interests of American citizens and ensure the integrity of government-insured loan programs.”
Jeffrey D. Little, General Deputy Assistant Secretary for Housing, wrote in the Mortgagee Letter, “Currently, non-permanent residents are subject to immigration laws that can affect their ability to remain legally in the country. This uncertainty poses a challenge for FHA as the ability to fulfill long-term financial obligations depends on stable residency and employment.”
The new rule eliminates the “non-permanent resident” category from the FHA’s Single Family Title I and Title II programs.
The FHA provides mortgage insurance on loans made by FHA-approved lenders, insuring mortgages on single-family homes, multifamily properties, residential care facilities, and hospitals throughout the United States and its territories. FHA mortgage insurance protects lenders against losses. If a property owner defaults on their mortgage, the FHA pays a claim to the lender for the unpaid principal balance. Because lenders take on less risk, they are able to offer more mortgages to homebuyers.
The provisions of Mortgagee Letter 2025-09 may be implemented immediately, but must be implemented for FHA case numbers assigned on or after May 25, 2025.
Latest Actions to Protect American Citizens in Housing
Earlier this week, HUD Secretary Scott Turner and U.S. Department of Homeland Security (DHS) Secretary Kristi Noem signed the “American Housing Programs for American Citizens” Memorandum of Understanding (MOU), to end the wasteful misappropriation of taxpayer dollars to benefit illegal aliens instead of American citizens.
As part of this new agreement, HUD will provide a full-time staff member to assist in operations at the Incident Command Center (ICC), establishing an interagency partnership to facilitate data sharing and ensure taxpayer-funded housing programs are not used to harbor or benefit undocumented immigrants.
“American tax dollars should be used for the benefit of American citizens, especially when it comes to an issue as pressing as our nation’s housing crisis,” said Secretary Turner. “This new agreement will leverage resources including technology and personnel to ensure American people are the only priority when it comes to public housing. We will continue to work closely with DHS to maximize our resources and put American citizens first.”
According to recent data from the Center for Immigration Studies, approximately 59% of undocumented immigrant households use one or more welfare programs, creating roughly $42 billion in costs. Across the country there are about nine million residents of public and subsidized housing without proper information sharing to determine eligibility status. Under the Biden administration, states and localities introduced legislation to ban undocumented immigrants from public housing.
“The Biden Administration prioritized illegally aliens over our own citizens, including by giving illegal aliens taxpayer-funding housing at the expense of Americans. Not anymore,” said DHS Secretary Noem. “The entire government will work together to identify abuse and exploitation of public benefits and make sure those in this country illegally are not receiving federal benefits or other financial incentives to stay illegally.”
In addition to the American Housing Programs for American Citizens MOU, HUD, through its office of Public and Indian Housing (PIH), instructed Moving to Work (MTW) Public Housing Authorities (PHAs) to comply with Section 214 of the Housing and Community Development Act of 1980, prohibiting HUD-funded service providers from providing financial assistance to illegal immigrants.
Click here fore more on the “American Housing Programs for American Citizens” MOU.
