Rep. Pete Aguilar (CA-31), U.S. Senator Bob Menendez (D-N.J.) and Rep. Juan Vargas (CA-51), led a bicameral group of colleagues in requesting the Inspector General for the Department of Housing and Urban Development (HUD) to open an investigation into whether the agency violated the Administrative Procedure Act (APA) in its decision to change the agency’s policy to deny Federal Housing Administration (FHA) insured loans to Deferred Action for Childhood Arrivals (DACA) recipients.

“As an internal matter, HUD decided to exclude DACA recipients from FHA loans. In the summer and fall of 2018, several internal communications reflect that HUD’s existing requirement that FHA loan applicants have ‘lawful residency’ was being reinterpreted to exclude DACA recipients. [W]e believe [this] was a change of policy without sound and unambiguous legal reasoning, without an opportunity for public input under Section 553 of the APA, and without communication to FHA-approved lenders and Congress,” the lawmakers wrote to Inspector General Rae Oliver Davis in their request for an investigation into this matter. “HUD also failed to disclose and misrepresented to Congress that a change in policy had occurred in Congressional hearings, letter responses, and briefings to Congressional staff. Accordingly, we respectfully request that your office open a formal investigation into this matter.”

Despite DACA recipients being able to receive FHA-backed loans during the Obama Administration, in December 2018 news reports indicated that HUD was quietly denying these loans to DACA recipients without an official announcement of any changes in the agency’s policy. Subsequently, and as a response to a letter from Sen. Menendez and a group of colleagues, HUD assured lawmakers that “[t]he Department wants to be very clear that it has not implemented any policy changes during the current Administration, either formal or informal, with respect to FHA eligibility requirements for Deferred Action for Childhood Arrivals (DACA) recipients.”

Facing questions in April 2019, Sec. Carson denied knowing anything about the change in FHA policy, responding to Rep. Aguilar that he had “inquired of the appropriate people, including the FHA commissioner and no one was aware of any changes that had been made to the policy whatsoever.”

In June 2019, in a letter to Rep. Aguilar, HUD informed Congress that DACA recipients were in fact ineligible for FHA loans. In further clarifying HUD reaffirmed the agency “ha[d] not implemented any policy changes during the current Administration with respect to FHA eligibility requirements for DACA recipients.” 

Last week, HUD’s records and internal communications released as part of a Freedom of Information Act (FOIA) request by Democracy Forward, revealed that the agency, in fact, had quietly changed its policy towards DACA recipients notwithstanding continuous denials to Congress.

Today, Sen. Menendez pressed HUD Secretary Ben Carson on this issue at a Senate Banking Committee hearing. “In fact HUD made a choice to exclude DACA recipients from FHA loans by defining ‘lawful residency’ in a manner to exclude them, which is made clear in the FOIA documents,” said Sen. Menendez to Sec. Carson, who committed to cooperate with the HUD Inspector General’s investigation into this policy change.

“The facts are clear: HUD officials implemented a secret policy change to discriminate against DACA recipients. HUD failed to disclose this change publicly and misrepresented that a change in policy had occurred in Congressional hearings, letter responses, and briefings to Congressional staff. This is wrong and unacceptable,” said Sen. Menendez. “We are requesting that HUD’s Inspector General investigate potential violations of federal law and failure to disclose this policy change to Congress. We hope there is a full and independent investigation.”

“HUD chose to exclude lawful homebuyers from accessing FHA-backed home loans,” said Rep. Vargas. “DREAMers earned the right to buy a home as taxpaying participants in our country’s labor force. This is why I’m proud to be leading a letter with my colleagues urging HUD to conduct a full investigation into their questionable actions resulting in the exclusion of DREAMers.”

“It’s unacceptable for the Trump Administration to secretly change the rules to stop DACA recipients from achieving the dream of home ownership. It’s equally unacceptable that the HUD Secretary would lie to Congress about the Trump Administration’s discriminatory housing practices,” said Rep. Aguilar. “We’re demanding an investigation because it’s wrong and unlawful for the Trump Administration to implement new and discriminatory housing policies and attempt to hide the truth from the Congress and the American people.”

Joining Sen. Menendez, Reps. Vargas and Aguilar in requesting this investigation are Sens. Sherrod Brown (D-Ohio), Catherine Cortez Masto (D-Nev.), Cory Booker (D-N.J.), Mazie Hirono (D-Hawaii), Kamala Harris (D-Calif.), Chris Van Hollen (D-Md.), Kristen Gillibrand (D-N.Y.), Bernie Sanders (I-Vt.), Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), Jacky Rosen (D-Nev.), Amy Klobuchar (D-Minn.) and Reps. Jesús “Chuy” Garcia (D-Ill.-4), Sylvia R. Garcia (D-Tex.-29), Raúl M. Grijalva (D-Ariz.-3), Alexandria Ocasio-Cortez (D-N.Y.-14), Joaquín Castro (D-Tex.-20), Adriano Espaillat (D-N.Y.-13), Bill Foster (D-Ill.-11), Vicente Gonzalez (D-Tex.-15), Gilbert R. Cisneros, Jr. (D-Calif.-39), Carolyn B. Maloney (D-N.Y.-12), Nydia M. Velázquez (D-N.Y.-7), Gregory Meeks (D-N.Y.-5), Grace F. Napolitano (D-Calif.-32), Ed Perlmutter (D-Colo.-07), Jim Costa (D-Calif.-16), Nanette Diaz Barragán (D-Calif.-44), Norma Torres (D-Calif.-35), Julia Brownley (D-Calif.-26), Albio Sires (D-N.J.-8), Lucille Roybal-Allard (D-Calif.-40), Jimmy Gomez (D-Calif.-34), Ayanna Pressley  (D-Mass.-7), Darren Soto (D-Fla.-09), Susan A. Davis (D-Calif.-53), Linda T. Sánchez (D-Calif.-38), José E. Serrano (D-N.Y.-15),  Jim Himes (D-Conn.-4), Barbara Lee (D-Calif.-13), Adam Smith (D-Wash.-9), Alma S. Adams, Ph.D. (D-N.C.-12).

A study of DACA beneficiaries showed many positive effects on the economy, including 14 percent of respondents who were able to purchase their first home after receiving DACA protections and among respondents 25 years and older, this share increased to 20 percent.

Rep. Vargas and Sen. Menendez are the authors of the Homeownership for Dreamers Act, which clarifies that DACA recipients – also known as Dreamers – cannot be denied mortgage loans backed by the Federal Housing Administration (FHA), Fannie Mae, Freddie Mac, or the U.S. Department of Agriculture (USDA) solely because of their immigration status.

The bill is supported by UnidosUS, United We Dream, National Fair Housing Alliance, Asian Real Estate Association of America (AREAA), National Association of Hispanic Real Estate Professionals (NAHREP), Mortgage Bankers Association, National Association for the Advancement of Colored People (NAACP), Leadership Conference on Civil and Human Rights, Center for Responsible Lending, American Friends Service Committee Immigrant Rights Program in New Jersey, Make the Road NJ, Arizona Dream Act Coalition, Public Citizen, Americans for Financial Reform and the National Coalition for Asian Pacific American Community Development.

“In the midst of a deep crisis in our country, where Black people and allies have taken to the streets to protest police brutality and systemic racism and while people continue to suffer from COVID-19, the Trump administration continues to find ways to attack DACA recipients, a majority of whom are people of color. Trump and Ben Carson know that the DACA decision from the Supreme Court is imminent and they are betting on the court siding with them so that they can strip DACA recipients of their deportation protections and programs that are vital to their wellbeing. This is cruel and predatory and Members of Congress must reject these policy changes,” said Sanaa Abrar, United We Dream Advocacy Director about the Lawmaker’s request to HUD’s Inspector General.

The full text of the letter can be found here.