A newly surfaced Freedom of Information Act response shows the Federal Housing Administration cannot readily say how many noncitizen borrowers have FHA-insured mortgages, even after it changed the rules to tighten who qualifies. The agency does not collect or retain borrowers' citizenship or residency status in its loan records, which means there is no clean tally of how many non-permanent residents, including H-1B visa holders, received FHA-backed loans under the old playbook. That data gap lands almost a year after FHA rolled out Mortgagee Letter 2025-09, which scrapped the "non-permanent resident" eligibility category for FHA programs and raised fresh questions about oversight and exposure.
What the FOIA found
According to The Dallas Express, HUD's Office of Single Family, Denver Homeownership Center searched for records tied to a request about H-1B recipients and "did not locate any documents" that would show how FHA benefits are distributed by visa status. The FOIA response, the outlet reports, repeated that "FHA does not retain citizenship or residency data from the loan application," language the agency has already used in recent guidance. In practical terms, there is no agency-level database that can spit out a count of how many insured mortgages were made to non-permanent residents.
What HUD changed
In March 2025, FHA issued Mortgagee Letter 2025-09, removing the non-permanent resident category from its Single Family Title I and II programs and directing mortgagees to follow new eligibility rules for case numbers assigned on or after May 25, 2025, as outlined by HUD. HUD framed the shift as an effort to reserve federal housing benefits for U.S. citizens and lawful permanent residents and said the update would be folded into the Single Family Handbook. The guidance makes it clear that lenders are expected to document residency status up front, even though FHA itself does not maintain a centralized citizenship field on the back end.
How lenders are supposed to comply
Industry reporting notes that mortgagees must determine a borrower's residency status using the Uniform Residential Loan Application (URLA) and supporting documentation, and that a Social Security card by itself does not count as sufficient proof of immigration or work authorization, according to HousingWire. Lender bulletins also say the citizenship portion of section 1a on the URLA has to be completed for covered transactions, and that loan origination systems will need to flag residency data for underwriting and compliance checks, according to industry notices such as the one from Newrez. In short, lenders do the heavy lifting on residency tracking while FHA flies without a simple historical ledger.
Who stands to be affected
Mortgage and immigration analysts say the rule change hits H-1B visa holders, OPT students and some DACA recipients who, under prior practice, could qualify for FHA financing if they met work-authorization and residency tests. Many of those buyers are now expected to pivot to conventional or portfolio loans, which typically require higher down payments. Market watchers warn that cutting these borrowers out of FHA programs could cool first-time buyer demand in employment hubs where temporary visa holders are clustered. VisaVerge has outlined practical alternatives for affected borrowers. Trade groups have also been sounding alarms about the potential economic fallout, with Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals, telling RISMedia that the reversal "will reduce meaningful transaction volume" in immigrant communities.
Why the data gap matters
Without an FHA-level count of borrowers' residency status, researchers and policymakers are left stitching together estimates from lender files, HMDA samples and other fragmented sources. That makes it tougher to track how the policy change is affecting access to credit on the ground. Compliance advisers and industry groups have also flagged that the shift carries implications for risk to the Mutual Mortgage Insurance Fund and for lenders' post-endorsement reviews, points that have been dissected in trade and legal commentary. With no single, agency-held dataset, even basic questions about past exposure and future policy outcomes become harder to answer cleanly.
For readers who want to see the paperwork for themselves, the FOIA reply is detailed in reporting by The Dallas Express, and FHA's mortgagee guidance and implementation timeline are posted on HUD.
