DACA & ITIN Home Loans in Texas: Mortgage Options (2026)

If you are researching a DACA home loan in Texas or looking into an ITIN mortgage, the rules you may have read a couple of years ago look very different in 2026 after major federal policy shifts at FHA and USDA.

This guide walks through what changed in 2025 and 2026, what published guidelines from Fannie Mae, Freddie Mac, VA, and federal regulators actually say, and how lender-specific ITIN and non-QM loans work across Texas.

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You will leave with a clear, realistic checklist of the questions and documents to bring to a mortgage lender so you can confirm your exact eligibility before you start shopping for a home.

What Changed for FHA DACA Loans in 2025 and 2026

FHA Loans in Texas were once open to non-permanent resident borrowers. In March 2025, the U.S. Department of Housing and Urban Development (HUD) ended that eligibility.

In HUD Mortgagee Letter 2025-09 ("Revisions to Residency Requirements"), dated March 26, 2025, HUD removed the Non-permanent Residents sections of its handbook in their entirety, eliminating eligibility for non-permanent resident borrowers. On the same day, HUD Title I Letter 490 applied the exact same residency revision to Title I Property Improvement and Manufactured Home Loan programs.

Both letters took effect for FHA case numbers assigned on or after May 25, 2025 (and lenders were permitted to implement them immediately). The current HUD Handbook 4000.1 (Last Revised August 12, 2026) reflects this change and no longer contains a non-permanent resident category.

Under current FHA rules, eligible residency categories are limited to:

• U.S. citizens
• Lawful permanent residents (with evidence from U.S. Citizenship and Immigration Services, or USCIS, and status indicated on the Uniform Residential Loan Application)
• Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau

HUD Mortgagee Letter 2025-09 also states plainly that a Social Security card is not sufficient to prove immigration or work status. Following the rule change, a HUD press item dated October 9, 2026 (republishing HousingWire and citing ICE data) noted that non-permanent residents' share of FHA purchase originations fell from about 5.8% to about 0.1%.

For a look at standard FHA credit and property rules for eligible permanent residents and citizens, see our guide to Texas FHA Loan Requirements (2026).

USDA Ended Its Non-Citizen Waiver in March 2025

The U.S. Department of Agriculture (USDA) made a parallel change to its rural housing program in early 2025. Under federal regulation 7 CFR 3555.151(b), applicants for a Section 502 Single Family Housing Guaranteed Loan must demonstrate that they are U.S. citizens, U.S. non-citizen nationals, or "qualified aliens" as defined in 7 CFR 3555.10.

Previously, USDA operated a temporary waiver that allowed certain non-citizens with a Social Security number and valid work authorization (such as an Employment Authorization Document, Form I-766) to apply. According to a lender summary of USDA's procedure notice (Pennymac Correspondent Announcement 25-30, dated March 19, 2025), USDA ended that temporary waiver effective March 18, 2025.

Whether any specific work-authorization categories count as a "qualified alien" under USDA's internal job aid could not be verified, so buyers considering rural financing should confirm residency eligibility directly with an approved USDA lender. You can read more about how the program works in our overview of USDA Loans in Texas (2026).

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Can DACA Recipients Buy a House in Texas? Conventional and VA Rules

When buyers ask "can DACA recipients buy a house in Texas" now that FHA and the USDA waiver are off the table, the conversation shifts to conventional loans (Fannie Mae and Freddie Mac), VA loans, and portfolio or non-QM financing. Because federal agencies and individual lenders do not all follow the same rulebook, it is important to separate published agency text from unverified or lender-specific policies.

Fannie Mae Conventional Loans

In the live Fannie Mae Selling Guide B2-2-02 ("Non–U.S. Citizen Borrower Eligibility Requirements," dated July 28, 2015), Fannie Mae states that it buys mortgages made to non-U.S. citizens who are lawful permanent or non-permanent residents of the United States under the same terms available to U.S. citizens.

However, Selling Guide B2-2-02 does not specify the exact immigration documents a lender must collect, and it does not explicitly mention DACA or ITIN borrowers. Instead, Fannie Mae places the responsibility on the originating lender to decide whether the borrower is "legally present" in the United States on a case-by-case basis and to warrant that legal presence to Fannie Mae. (According to USCIS, deferred action does not provide lawful status.)

While a 2019 Fannie Mae fact sheet reported by secondary sources treated DACA recipients with a valid Employment Authorization Document as legally present, that separate fact sheet could not be opened directly, and many lenders may add their own stricter rules, known as lender overlays. Always ask a lender to confirm its current investor guidelines before applying.

Freddie Mac Conventional Loans

Current Freddie Mac rules for DACA borrowers are unverified because the live Freddie Mac Seller/Servicer Guide could not be accessed directly. While a 2020 mortgage insurance blog reported that Freddie Mac Guide Section 5103.2 generally allows non-U.S. citizens who are lawfully residing as permanent or non-permanent resident aliens, a January 2021 lender announcement (Pennymac Announcement 21-06) listed Freddie Mac Section 5103.2 as making DACA recipients ineligible while treating Fannie Mae as eligible with an EAD. Because of this conflict in secondary sources, Texas buyers should confirm current Freddie Mac eligibility with a participating lender.

VA Loans

Eligibility for VA Loans in Texas is rooted in qualifying military service. A 2021 lender announcement stated that VA loans were eligible for veterans with DACA status, but this statement could not be verified against official Department of Veterans Affairs sources, and rules regarding a non-veteran co-borrower's residency status were not verified. Veterans or military families with residency questions should ask a participating VA lender to verify current VA underwriting rules.

ITIN Mortgage Options in Texas (Non-QM and Portfolio Loans)

For Texas residents who file federal taxes using an Individual Taxpayer Identification Number (ITIN) rather than a Social Security number, the usual government and agency loan programs are not a fit.

According to the Internal Revenue Service (IRS), an ITIN is a nine-digit number issued for federal tax purposes only. The IRS notes that an ITIN:

• Does not authorize work in the United States
• Does not provide immigration status
• Does not qualify the holder for Social Security benefits or the Earned Income Tax Credit
• Is not valid identification outside the federal tax system
• Cannot be held at the same time as a Social Security number (a person cannot have both an ITIN and an SSN)

No FHA, Fannie Mae, Freddie Mac, VA, or USDA loan program was found that accepts ITIN-only borrowers (and FHA Title I explicitly requires a valid SSN for each borrower under HUD Handbook 4000.1 II.E.4).

Because of this, an ITIN mortgage in Texas is a non-QM (non-qualified mortgage) or portfolio product that varies by lender. In a portfolio or non-QM loan, the lender sets its own guidelines for:

• Down payment requirements
• Credit requirements
• Income and tax documentation
• Property types and occupancy

Because each lender sets its own rules, down payments and approval requirements vary from one lender to the next. Rates are set daily, and a lender can quote today's rate based on your profile.

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June 2026 Federal Guidance: CFPB and FinCEN Notices Explained

If you have heard rumors that the federal government banned mortgages for non-citizens or ITIN holders in mid-2026, it helps to read what the June 2026 federal notices actually say. Neither agency banned non-citizen or ITIN lending, but both issued guidance to lenders and financial institutions.

CFPB Statement on Ability to Repay and Immigration Status (June 2026)

In Federal Register Document 2026-11447 (scheduled for publication on June 8, 2026, and applicable upon publication), the Consumer Financial Protection Bureau (CFPB) issued a "Statement on Ability to Repay and Immigration Status," citing Executive Order 14406.

Key facts from the CFPB document:

• It is a statement, not a new rule.
• It reminds creditors that existing Truth in Lending Act (TILA) and Regulation Z ability-to-repay rules "may obligate consideration of a consumer's immigration status, especially where removal from the United States may disrupt the consumer's income."

FinCEN Advisory FIN-2026-A002 (June 5, 2026)

On June 5, 2026, the Financial Crimes Enforcement Network (FinCEN), jointly with federal bank regulators, issued Advisory FIN-2026-A002 on non-work-authorized populations.

Key facts from the FinCEN advisory:

• It states that the use of an ITIN in place of an SSN or valid work authorization to obtain credit or open financial accounts may be "a relevant risk factor" calling for enhanced due diligence by the financial institution.
• It emphasizes that no single red flag is determinative.
• It is Bank Secrecy Act / Anti-Money Laundering (BSA/AML) guidance and does not ban ITIN lending.

Neither June 2026 notice bans lending to ITIN holders or non-citizens. If you are applying with an ITIN or non-permanent resident documents, ask your lender what documentation it will need.

Self-Employed and 1099 Borrowers Using Alternative Loans

Some Texas homebuyers, whether they apply with an SSN on a conventional loan or an ITIN on a non-QM loan, earn their living as independent contractors, sole proprietors, or small-business owners. According to the IRS, individuals who carry on a trade or business as a sole proprietor or independent contractor (including part-time or gig work) are generally considered self-employed and report their business income on Schedule C.

How your income is calculated depends on the loan channel you use:

• Fannie Mae Conventional Loans: Under Selling Guide B3-3.5-01, a borrower with a 25% or greater ownership interest in a business is considered self-employed. Fannie Mae generally requires a two-year history of self-employment, though 12 to 24 months may be acceptable if the borrower's most recent signed tax returns show a full year of self-employment income in the current business and prior income was at the same or a higher level in the same or a similar occupation. One year of personal and business returns is allowed only when the business has existed for 5 years and the borrower has owned 25% or more for 5 consecutive years.
• Bank-Statement (Non-QM) Loans: Under the federal ability-to-repay rule (12 CFR 1026.43(c)(4)), lenders must verify income using third-party records, which include tax returns, W-2s, payroll statements, and "financial institution records." Non-QM bank-statement programs rely on that rule and typically use 12 to 24 months of bank statements. Like ITIN loans, bank-statement programs are non-QM products set by individual lenders, and down payment, credit score, and statement count vary by lender.

Practical Next Steps for Texas Homebuyers in 2026

Because agency rules, federal advisories, and investor overlays have shifted significantly between March 2025 and October 2026, the smartest move you can make is to verify your financing options before you sign a purchase contract or pay for a home inspection.

Here is how to prepare for a productive conversation with a mortgage lender:

1. Clarify your tax and identification profile up front. Let the loan officer know immediately whether you file taxes with a Social Security number or an ITIN, and what residency or work-authorization documentation you hold, so they only match you with investors whose current guidelines fit your situation.
2. Gather two years of complete income and tax records. Whether you are exploring a conventional loan or a non-QM ITIN portfolio program, having two years of federal tax returns, W-2s or 1099s, recent pay stubs, or 12 to 24 months of bank statements ready will speed up a lender's review.
3. Keep your down payment and closing funds in a documented account. A clear bank statement history helps a lender verify where your savings came from.
4. Compare all Texas Home Loan Options early. Review general credit, debt-to-income, and closing cost basics in our guide to Requirements to Buy a House in Texas.

Bottom Line

FHA ended eligibility for non-permanent residents and USDA ended its non-citizen waiver in 2025, but some lenders offer conventional financing to eligible non-citizen borrowers or non-QM and portfolio loans to ITIN taxpayers. Because every lender sets its own overlays and documentation rules under current federal guidance, our team at Make Texas Your Home can help you review your options and connect with a lender that matches your profile.

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