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.”

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.

NAR is actively engaging with FHA to evaluate the effects of the policy change on current participants and potential borrowers and will provide updates accordingly.