The issuance of new FHA mortgages to non-permanent U.S. residents has plummeted to almost zero, according to recent data, reflecting the impact of President Donald Trump’s latest executive actions aimed at tightening immigration policies.
In a March 26 announcement, the Department of Housing and Urban Development (HUD) stated that non-permanent residents, including H-1B visa holders, would lose eligibility for Federal Housing Administration (FHA)–insured mortgages starting May 25.
The HUD letter emphasized that the policy change reflects President Trump’s “commitment to safeguarding economic opportunities for U.S. citizens and lawful permanent residents,” while also ensuring that “federal benefits, including access to FHA-insured mortgages, are reserved for individuals who hold lawful permanent resident status.”
A recent report from JBREC, authored by Thomas along with Eric Finnigan and Zack Ray, shows that non-permanent residents (NPRs) accounted for less than one percent of FHA-backed loans nationwide in June. This marks a sharp decline from nearly 5.5 percent in May and more than 6 percent in April.
In July and August, the proportion of non-permanent residents obtaining FHA-insured loans fell to nearly zero, reaching the lowest level recorded in JBREC’s data series, which extends back to February 2018.
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“New FHA mortgages to NPRs have dropped to near-zero following a rule change in May,” Alex Thomas, one of the experts behind JBREC’s new report, wrote on X. “NPRs made up ~4 percent of FHA loan volume nationally in 2024; more in some markets, especially in Florida.”
Thomas told Newsweek that the findings largely matched what they had anticipated. “Policy shifts in housing finance often show up quickly in the data. We also saw a clear surge in FHA loan locks by non-permanent residents in April and May, when NPR borrowers rushed to lock in their loan before the new rule took effect at the end of May,” he said.
According to Thomas, the recent plunge in FHA loans to non-permanent residents is primarily because these buyers have largely stopped purchasing homes.
With FHA-backed mortgages no longer an option, non-permanent residents must turn to alternative financing such as conventional loans, which are not federally guaranteed. These loans typically demand strong credit scores, proof of U.S. income, and employment documentation are criteria that many foreign buyers may struggle to meet.
“Non-permanent residents can still use conventional financing to secure a mortgage,” Thomas said. “However, FHA financing is often used because of its more lenient underwriting requirements. NPR borrowers who are now locked out of FHA loans may not be able to qualify for conventional loans, and we have seen a dip in overall volume of mortgages going to non-permanent residents over the last several months.”
The combination of the Trump administration’s stricter rules and rising home prices has, according to recent data, significantly limited non-permanent residents’ ability to enter the housing market.
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Finnigan noted on X that the FHA’s May restriction on lending to H-1B visa holders and other non-permanent residents is putting pressure on “entry-level home-buying in some key housing markets already dealing with weak sales & too much supply.”
The move is also reducing the attractiveness of the U.S. for H-1B visa holders, particularly after last month’s presidential proclamation that introduced a $100,000 application fee for the visa. Experts and employers have cautioned that the steep fee could make it harder for American companies to recruit and retain skilled talent.
“This executive order stifles a legal immigration program on which many American businesses depend—with effects that benefit Americans and the U.S. economy,” Jennie Murray, President and CEO of the National Immigration Forum, as per a previously said in a statement to Newsweek.
“Non-permanent residents made up just 4 percent of FHA loan volume in 2024, and were historically just 2-3 percent of FHA loan volume,” Thomas said.
“Because there’s no cap on the number of FHA loans, non-permanent residents weren’t competing with U.S. citizens or permanent residents for limited financing. For permanent residents, the main barrier to homeownership today is poor affordability—a function of high home prices, high mortgage rates, and rising homeownership expenses,” Thomas added.
