FHA Eligibility Update: What You Need to Know About the New Residency Rules

At The CL Team at Luminate Bank, we’re all about keeping you informed and empowered—especially when big industry changes come down the pipeline. A new FHA guideline was just released that could impact who’s eligible for FHA financing, and we want to make sure you have all the details.

What’s Changing?

Starting May 25, 2025, non-permanent resident borrowers will no longer be eligible for FHA loans. That includes all FHA loan types, even Streamline Refinances.

So, who’s still eligible moving forward?

• U.S. Citizens
• Green Card Holders (Lawful Permanent Residents)
• Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau

What Will Borrowers Need to Provide?

Here’s what FHA lenders (like us!) will be looking for when reviewing borrower eligibility:

• For Green Card holders: Documentation from U.S. Citizenship and Immigration Services (USCIS) confirming lawful permanent residency, plus proper indication on the loan application.
• For citizens of Micronesia, the Marshall Islands, or Palau: Proof of citizenship.

Important: A Social Security card on its own won’t be enough to verify immigration or work status.

Can This Be Enforced Earlier?

Yes—while May 25 is the official effective date, individual investors may choose to adopt this rule sooner. We’re closely monitoring those guidelines and will update locks or processes if needed to ensure everything stays on track.

Why It Matters

If you’re a borrower (or working with one) who currently falls under non-permanent resident status, now’s the time to act. This update could change the game for FHA eligibility, so having a trusted lender by your side is more important than ever.

We’ve Got Your Back

At The CL Team, we believe knowledge is power—and sharing that knowledge is just one more way we help you move forward with confidence. If you have questions about this update or want to know how it might impact your home financing journey, we’re here to help every step of the way.

Let’s make your goals happen—no surprises, just clarity.