Manual: Immigration status of applicants

This section explains the policy and legal issues surrounding immigration status and helps Covenant Partners (CPs) formulate sound policies for processing and evaluating applications from people with varying statuses. Immigration status is a relevant factor in homeowner selection.

The CP may consider whether an applicant is a permanent resident of the United States, the applicant’s immigration status, and any additional information that might be needed to ascertain the CPs rights and remedies regarding repayment. Although the CP may solicit residency status (e.g., U.S. citizenship or permanent resident status) from applicants, this information cannot be used to deny homeownership unless temporary or illegal residency is determined. The ECOA provides that families shall be selected without regard to ethnic background.

If any piece of information is used to evaluate applicants for Fuller Center houses, it must relate to one of the three selection criteria: need, ability to pay and willingness to partner. Residency status does not directly relate to need or willingness to partner, but it might affect an applicant’s ability to pay.

Evaluating an applicant’s ability to pay involves an assessment of whether the applicant currently possesses the means to repay a Fuller Center mortgage or Greater Blessing loan and other home costs, whether that ability is likely to continue for the foreseeable future, and whether the CP will be adequately secured by its mortgage on the property. Residency status is most likely to affect the second part of the assessment: whether the repayment ability is likely to continue for the foreseeable future.

Residency status will not affect the CPs security in the house. Non-citizens and non-residents can own land in the United States, and their status will not prevent the CP from holding a valid mortgage on the property. A non-resident may be limited, however, in the income he or she can receive and in particular by how long he or she can continue to receive an income and remain in the United States. When judging an applicant’s ability to pay, Cps should generally evaluate whether the applicant’s income can reasonably be expected to last for at least three years. Residency status may therefore affect this evaluation.

With immigrant populations growing in many parts of the county, it is important for CPs to consider these issues and adopt a policy for their selection committees to follow.

FCH allows CPs to determine their own immigration status policy, using their own best judgment about how residency affects ability to pay, taking into account the dynamics of their local situation and local laws. The available policy spectrum ranges from making no inquiry into residency status to requiring proof of permanent residency (“green card” or citizenship). CPs should not distinguish between citizens and non-citizen, permanent residents, because the difference between those two classifications will not affect an applicant’s ability to live or earn an income in the United States. CPs must also be aware of their state’s requirements before creating a policy. We strongly recommend consulting with an immigration attorney for guidance on drafting an immigrant policy. The three major policy choices include the following:

  • No inquiry: CPs may choose to make no inquiry into residency status. The risk to the CP is that if the new homeowner is a temporary resident or is an undocumented immigrant, he or she might lose his or her source of income or be forced to move away from the house (i.e. be deported). Each state may have residency requirements; know the requirements of your state.

  • Any legal status: A middle policy is to require any current legal residency status that gives the applicant the right to live in the United States and to legally receive the income he or she is claiming on the application. Such status would demonstrate there is no immediate threat that the applicant would be deported. A CP may also require some evidence that the legal residency is likely to continue for a period that will justify the extension of credit for the sale of the house. A CP might wish to be reasonably sure that the applicant’s residency status can similarly be projected to last for at least three years, which would be in line with underwriting standards of projecting income out to three years. An applicant with permanent residency or citizenship will, of course, qualify.

  • Permanent status: The most conservative approach is to require permanent residency status from all applicants. Administratively, this is the easiest approach for CPs, though it might exclude applicants in need who are in the process and will ultimately gain permanent residency.

How to Gather Residency Information:

CP asks applicants to declare whether they are citizens or permanent residents (FCH Application for Housing and to provide an explanation of residency status if they are not). For some CPs, this declaration will be sufficient proof of residency. Other CPs might wish to require verification of residency status. Remember that if you choose to require verification, it is very important the you require if from all applicants. There are many documents that can be used to verify residency status, including a U.S. passport, certificate of citizenship, certificate of naturalization, refugee travel document, alien registration receipt card, birth certificate and certificate of birth abroad. Some CPs might find it helpful to use the Form I-9 Employment Eligibility Verification form as a guide to proof of residency and identity. All employers must use this form to establish an employee’s eligibility to work in the United States. As such, it should be familiar to most homeowner selection staff and committee members. It lists the various documents that establish identity and authorization to work in the United States, for both citizens and non-citizens. It is not necessary to actually fill out the form for each applicant, but it can be used as a guide to the necessary documents. A copy of Form I-9 can be downloaded from the U.S. Citizenship and Immigration Services website, A word of caution about using Form I-9: You could receive an application from a person who is not a permanent resident or citizen and is claiming non-employment income on his or her application. In such a case, it is possible that he or she could have a valid temporary resident document that is not listed in Form I-9. If you encounter such an applicant, you should contact your CP attorney for assistance in determining whether the document the applicant is providing is adequate.

As stated above, if a CP determines that residency status legitimately relates to the creditworthiness of an applicant, it may use residency status as a factor in its application decisions. But when determining residency status, it is important not to inadvertently discriminate on the basis of ethnicity, race, color or national origin. This means that your procedural requirements must be the same for all applicants. If you decide to require proof of residency, you must require proof of residency from all applicants, not merely from foreign-born applicants or from those who do not speak English as a first language. As discussed above, Form I-9 can be used for guidance on how citizens and non-citizens can prove their residency status.

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