The Washington Report
April 21, 2025
In This Issue:
Accessibility
FHA Programs (Federal Housing Administration)
Accessibility
Judge Allows HUD to Cancel Fair Housing Grants
On Monday, April 14, a judge allowed HUD to proceed with clawing back 78 fair housing grants awarded to fair housing organizations in 33 states. The grants, which are authorized by statute, support fair housing education and enforcement efforts in local communities.
Judge Richard Stearns of the U.S. District Court in the District of Massachusetts dissolved a temporary restraining order he had earlier granted directing HUD to reinstate canceled grants in a case brought by fair housing groups.
Stearns cited the Supreme Court’s recent decision to allow the administration to go forward in terminating billions of dollars in education grants while litigation in that case proceeds. The Supreme Court directed that the proper forum for such cases is the Court of Federal Claims.
FHA Programs (Federal Housing Administration)
Updates on FHA Changes to Residency Requirements for Program Eligibility
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.