Non-Citizen Borrowers Losing Access to FHA Financing 🚫🏠

Hello everyone! We’re already wrapping up the first quarter of 2025—and wow, what a start it’s been!

The market's moving fast with some major shifts, but as always, I've got you covered with the updates you need most.

Let's jump into this week’s top stories!

Read time: ~4 minutes

Rates ended HIGHER compared to last week, and volatility was HIGH. Rates are in the high 6’s for most loan types without paying discount points. Paying discount points can get you in the mid-to-low 6’s.

Non-Citizen Borrowers Losing Access to FHA Financing 🚫🏠

If you haven’t heard yet, FHA loans are undergoing significant changes. Starting May 25, 2025, non-permanent residents will no longer qualify for FHA financing, closing what was previously a reliable pathway to homeownership, requiring just 3.5% down and a 580 credit score. In a similar move, USDA has also closed its doors to non-U.S. citizens.

Right now, Conventional loans from Fannie Mae and Freddie Mac remain an option for non-citizens, still available with just 3% down. But, given recent trends, it's worth keeping an eye out for possible future shifts in policy.

This is undoubtedly a blow to the housing market—fewer eligible buyers means reduced demand. However, to add some global context, the U.S. was previously much more lenient compared to other countries. For example:

• Canada currently bans non-citizens from purchasing residential real estate through January 2027.

• Mexico Requires 20-30% down for non-residents. Foreigners need government permission to purchase property located within 60 miles of Mexico's border or within 30 miles of its coastline.

• France, Spain, and Japan each require at least 20-40% down for non-residents.

• Australia mandates 30-40% down and restricts purchases to new homes or vacant land only.

Is a Foreclosure Crisis Really Looming? Here’s the Truth 🙅‍♂️📉

Have you seen the latest "foreclosure crisis" scare making the rounds on social media? You know, the one suggesting 6.1 million homeowners are behind on their payments and FHA loan delinquencies are over 11%? Before anyone hits the panic button, let’s unpack the truth behind these dramatic numbers.

Before you panic, let's set the record straight—these headlines are misleading. The scary stats you're seeing reference multi-family properties, not single-family homes. Multi-family properties (like apartment buildings) typically use adjustable-rate mortgages (ARMs) that reset every 3-5 years. As rates have jumped from the 3-4% range to over 7%, owners' payments have nearly doubled overnight.

However, single-family homes aren’t facing this same pressure. The reality is that delinquency rates for single-family properties remain stable and healthy—below 2%, far from the scary scenario the headlines suggest, and nowhere close to the crisis levels from 2008.

Clearing Up the Confusion Around Down Payment Assistance 🏡💰

My team and I have been hearing chatter from agents concerned about down payment assistance programs being cut. Let me clear things up: down payment assistance isn't going anywhere! While certain federal programs—known as Special Purpose Credit Programs (SPCPs)—are indeed ending, these specific programs targeted historically underserved communities and were used far less frequently.

The primary resources that a majority of loan officers rely on for their clients are 100% still available! In Nevada, our popular state bond program - Home Is Possible through the Nevada Housing Division remains in place, offering critical support for your buyers who need help with their down payment.

Buckle Up—Massive Week for the Markets Ahead! 🎢

We've got a wild ride ahead of us this week, with major events and economic data that could seriously move mortgage rates and markets. Here's what you need to watch closely:

📅 Tuesday – ISM Manufacturing Report
Weak manufacturing numbers might actually be good news for mortgage rates, signaling a slowing economy.

📅 Wednesday – Trump’s Big Tariff Announcement ("Liberation Day")
President Trump plans to unveil new tariffs, and regardless of whether they take effect, expect sharp volatility. Markets will react strongly either way.

📅 Friday – March Jobs Report (Critical!)

• If job numbers miss expectations (fewer new jobs), mortgage rates could drop.

• If job creation exceeds forecasts, rates could rise again.

Also on Friday, we’ve got Fed Chair Jerome Powell speaking. He'll likely repeat the Fed’s cautious stance, emphasizing that inflation needs to cool further before any rate cuts happen. Markets don't expect a cut at the May 7th Fed meeting, but there’s currently a 56% chance of one by June 18th. This week's events could drastically change those odds!

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