In this guide, we will cover DACA mortgage loans at Gustan Cho Associates. Gustan Cho Associates, empowered by NEXA Mortgage, LLC, are mortgage brokers licensed in 48 states, including Puerto Rico, The United States Virgin Islands, and Washington, DC. We have a network of 210 wholesale lending partners, including lenders on government and conventional loans with no lender overlays, non-QM loans, and alternative lending mortgage programs for owner-occupant primary homes, second homes, and investment properties.
Gustan Cho Associates has a national reputation of being able to do mortgage loans other lenders cannot do. Over 80% of our borrowers could not qualify at other mortgage companies.
The team at Gustan Cho Associates are experts on DACA mortgage loans, dozens of no-income verification, and little to no documentation mortgage loan programs. In the following sections of this guide, we will cover DACA mortgage loans and how it works.
DACA Mortgage Loans
As a borrower in the DACA (Deferred Action for Childhood Arrivals) program, obtaining a loan can be scary or difficult. We get it; it is a complicated process, so we have taken it upon ourselves to tell you everything there is to know about DACA mortgage loans. Whether you are buying your first home or investment property or are looking to refinance an existing mortgage, you need to check out our guide for more helpful information.
What is DACA?
Deferred Action for Childhood Arrivals (DACA) is a government program introduced under the Obama Administration and was meant to protect undocumented individuals who were brought into the country unlawfully as children and have been raised in the U.S. ever since, thereby primarily identifying as Americans.
What Is The Purpose of The DACA Recipient Program
The main aim of the DACA program is to protect DACA recipients from deportation. DACA laws allow DACA recipients to find work permits, state-issued photo identification, and social security numbers to continue living in the U.S. To be eligible for DACA, an individual must meet certain criteria. DACA recipients must have arrived in the country before the age of 16; You must have been in the country simultaneously for at least five years before the policy’s initiation.
To qualify for the DACA recipient program, you must have been physically present in the country on June 15, 2012, when making a DACA request. Must be under the age of 31 as of June 15, 2012. Should be in school or a veteran of the United States Armed Forces. Must not have a criminal record or any criminal history. Remember, though, that DACA doesn’t pave the way for you to obtain legal citizenship or allow you to obtain lawful status. Still, upon renewal, after every two years, you will be able to remain in the country.
Now, there are over 700,000 individuals in the United States under the DACA program, and with many of them young adults, of course, they would want to get into home ownership. But how can they acquire a loan with their current legal status? As of 2021, several mortgage products were made available to DACA recipients.
What is a DACA Home Loan For Dreamers?
In straightforward terms, a DACA home loan is a mortgage product designed for borrowers under the DACA program. These loans are available through FHA, private, and online mortgage lenders.
DACA mortgage loans work just like any other type of home loan. The lender will determine your eligibility for the loan plus how much you can afford to borrow. After that, you make monthly payments until the loan is cleared, just like other loans.
The main difference between DACA mortgage loans and regular traditional loans is that you might require a much larger down payment, as many lenders perceive these loans as riskier, but this is not always the case.
What Is The Eligibility Requirements on DACA Mortgage Loans
For you to qualify for a DACA mortgage, here are the minimum requirements that you must meet a minimum down payment of about 10 to 20 percent and a minimum credit score of about 580 FICO. The property you are looking to get must be a primary residence.
The borrower is required to have a social security number. The borrower must be eligible for work in the United States and should be able to provide the lender with an Employment Authorization Document (EAD) proving the same.
The EAD has to be issued by the USCIS, or U.S citizenship and immigration services. The property must be FHA-approved. You are required to occupy the property within 60 days. All the other requirements depend on the specific lender you selected.
Types of DACA Mortgage Loans
FHA DACA Mortgage Loans
FHA DACA Mortgage Loans are government-backed mortgages that the Federal Housing Administration insures. If you default on the loan, the government will come in and pay back the lender. These loans are available with adjustable and fixed interest rates. DACA recipients can borrow up to 96.5% of the entire home value. Regarding the term limit, the loans are available for 30, 20, 15, or 10 years.
Conventional DACA Mortgage Loans
Private and conventional DACA mortgage loans are loans from credit unions, banks, portfolio lenders, and other private lenders. Unlike the FHA loans, they aren’t backed by the government, meaning they may come with higher interest rates. The loans come with fixed and adjustable interest rates, and DACA recipients can borrow up to 97% of the property value.
Application Process For DACA Mortgage Loans
Applying for a DACA loan is very similar to a traditional loan. Here is a detailed step-by-step guide on how to do it:
Step One of The DACA Mortgage Loan Process
Step 1 – you first need to gather all the necessary documents for the application process. The documents may include your most recent pay stubs, bank statements, tax returns, or any other financial document requested by the lender.
Step Two of The DACA Mortgage Loan Process
Step 2 – once all your documents are ready, it’s time to fill out the loan application, which can be done online or through a local lender.
Step Three of The DACA Mortgage Loan Process
Step 3 – after that, you must apply with all the necessary documents for approval. The lender will go through all the documents and determine your eligibility for the DACA loan.
Step Four of The DACA Mortgage Loan Process
Step 4 – if you are approved for the loan, the next step will be for you to sign the mortgage agreement. With the pre-approval at hand, when you go house hunting, you will at least be able to narrow your search to only the properties within your budget. Also, the seller will be able to see that you are a serious buyer, which will change the dynamics of everything.
Step Five of The DACA Mortgage Loan Process
Step 5 – the underwriting process will follow, where the lender would like to see the property you are about to buy and several other details. And finally comes the signing of the final paperwork. You will now be able to close your home’s purchase. Once everything is done, it will be your turn to fulfill your responsibility by making monthly payments.
Benefits of DACA Mortgage Loans
As a borrower under the DACA program, there are a few benefits of buying a home using DACA home loans. In the next sections of this guide, we will cover the benefits of DACA mortgage loans for DREAMERS. Your dream of home ownership will become a reality. No more paying rent and not building equity. Why would you pay your landlord’s mortgage when you can pay your own and start building equity?
Opportunity To Build Equity in Your Home
Building equity in your home – with each monthly payment, you will be building equity. In the future, you can use that equity as collateral for other loans. No more unexpected rent payment hikes. No more insecurity about not getting your lease renewed. Stable monthly payments – the monthly payments for DACA mortgage loans remain the same for the lifetime of the mortgage.
As a homeowner, you will be able to budget easily knowing that your housing costs are month-to-month.
Potential lower interest rates – given that the government backs DACA mortgage loans, you may get a lower interest rate than conventional loans. Tax deductions – as mortgage interest and property taxes are tax-deductible, you can save some money come tax time. A sense of stability – as a young adult who has grown up in the U.S., owning a home is one dream that will be unthinkable. And with DACA loans, you will be able to achieve this and will be able to give you a sense of stability – that you are no longer renting.
Get Pre-Approved For a DACA Mortgage Loan Today
As a borrower under the DACA program, DACA mortgage loans are the way to finance a home purchase in the U.S. You can get various options available on DACA mortgage loans. But before selecting the best option for you, ensure that you first compare the interest rates, loan terms, and fees and the ease of availability. With the right option on the various wholesale lenders on DACA mortgage loans, your lifelong dream of becoming a homeowner in the U.S. will undoubtedly become a reality. Get in touch with a mortgage broker today for more guidance!