Weekly Real Estate News
New mortgage-origination data show a steep decline in FHA purchase lending to nonpermanent residents following a federal eligibility change that took effect in May 2025. The borrowers accounted for approximately 5.8% of FHA purchase originations before the change and about 0.1% afterward, according to Intercontinental Exchange data reported by HousingWire and highlighted by the Department of Housing and Urban Development on October 9.
The change was especially pronounced in Utah. Salt Lake City’s share fell from 26% to 0.15%, while Provo’s declined from 20% to less than 0.5%, according to the reported ICE figures. Those percentages describe the share of FHA purchase originations to this borrower group, not the share of all local home purchases.
HUD announced the policy in Mortgagee Letter 2025-09, removing the nonpermanent-resident eligibility category from FHA’s single-family programs effective May 25, 2025. WRE previously reported the eligibility change. The new development is the scale of the subsequent lending shift.
The ICE figures also show that nonpermanent residents’ share of purchase originations across all loan types declined from approximately 5.6% to 3.4%. Conventional prime conforming lending to the group did not rise enough to replace the FHA decline, according to HousingWire’s reporting.
HUD Secretary Scott Turner characterized the shift as a success for the administration’s eligibility policy. That is the administration’s assessment; the loan-level data alone cannot establish whether the change improved affordability for other buyers or caused local home prices to move.
Other markets recorded steep reductions. Orlando’s FHA share dropped from 16.1% to 0.2%; Raleigh’s from 11.1% to 0.8%. HousingWire quoted mortgage originators who said lawful nonpermanent residents may still qualify for conventional or non-QM loans but can face higher down-payment requirements or other financing obstacles.
There are important limits to the comparison. ICE’s pre-policy market analysis used second-quarter 2024 through first-quarter 2025 data, while the later period began in the fourth quarter of 2025. Changes in borrower composition, mortgage demand and local housing conditions may also affect the percentages. HUD’s announcement describes a reduction to nearly zero, while the reported ICE FHA share is approximately 0.1%; those are not identical measures.
The figures are consequential for originators serving lawful nonpermanent residents and for markets where FHA financing previously represented a substantial part of their purchase activity. They do not mean that all noncitizens are ineligible for FHA financing: lawful permanent residents remain a separate eligibility category under HUD’s revised requirements.
