How To Get a Bank Loan With DACA: The Complete Guide

In a Nutshell

It is generally difficult for Deferred Action for Childhood Arrivals (DACA) recipients to get bank loans — but it's still possible. Many banks and lenders will consider you a high-risk individual because of your status. Many banks consider DACA to be temporary and not guaranteed because DACA is easily affected by U.S. immigration law. However, DACA recipients can borrow from other lenders. You can get personal loans, student loans, and home loans from banks and other lenders. This article explains how to get personal loans, student loans, and home loans as a DACA recipient.

Written by Jonathan Petts
Written May 26, 2022

What Kind of Loans Can DACA Recipients Get?

Starting with the Obama administration, Deferred Action for Childhood Arrivals (DACA) recipients could remain in the United States and access a work permit, driver’s license, and Social Security number. Despite this, obtaining bank loans remains very difficult for Dreamers, who are considered high-risk borrowers. 

However, Dreamers still have some loan options. Those with DACA status are eligible for personal loans, student loans, and home loans. Your chances of successfully getting a loan depend on your “risk status” or how risky of a borrower you are.

Can DACA Recipients Get Personal Loans?

Usually, DACA recipients are eligible for personal loans. Personal loans are loans given for any personal reason. For example, you may want to finance your college tuition costs or house repairs. However, many lenders consider DACA loans a large risk. Because the law and status of DACA could change at any time, there is a risk that U.S. Citizenship and Immigration Services (USCIS) could deport you in the future. The bank would struggle to recover its money if that happened. 

Additionally, many Dreamers don’t have the required documents or substantial credit history. Many also lack a co-signer or someone willing to guarantee repayment if they cannot repay their loans. Banks tend to be unwilling to loan to DACA recipients. Still, alternative private lenders may be more likely to approve your loan request. 

Can DACA Recipients Get Bank Loans for School?

DACA program beneficiaries don’t qualify for federal financial aid or federal student loans. But you can explore alternative financial aid options. Undocumented students qualify for in-state tuition rates in certain states, such as New York, Florida, and Illinois. Your college may ask you to fill out the Free Application for Federal Student Aid (FAFSA) to see if your state’s Department of Education or the college itself will provide you with financial aid.

Depending on your state residency status, certain states like California, Connecticut, and Minnesota have financial aid programs specifically for Dreamers. You should contact your school’s financial aid office to inquire about your eligibility. You could also start searching for scholarships for undocumented immigrants in high school. 

Additionally, some schools and lenders consider DACA students to be international students. If this is the case, you may be able to get financial assistance for international students, such as private scholarships or private student loans. However, financial institutions may consider DACA student loans as “alternative” loans, which could cause higher interest rates. Carefully consider the repayment terms of any loan you take out, including the loan amount, interest rates, and whether there are fixed rates, monthly payment costs, origination fees, and autopay options.

Can DACA Recipients Get Home Loans?

DACA recipients are eligible for home loans. Often, traditional banks will not approve your application, but there are alternative options. One option is a loan from the Federal Housing Administration (FHA) designed explicitly for Dreamers. There are four requirements to qualify as a non-permanent resident: 

  • The property you are financing with the loan must be your primary residence. 

  • You need a valid Social Security number (SSN). 

  • You need to meet the other general loan requirements for U.S. citizens.

  • You need an Employment Authorization Document (EAD) from USCIS to prove you have permission to work in the United States. 

You could also try to get a loan from a private lender. These loans generally have fewer documentation requirements. However, they will probably expect a minimum credit score of 650. 

What Do You Need To Submit To Get a Mortgage as a DACA Recipient?

To apply for a mortgage as a DACA recipient, you will have to show these three documents: 

  • Your Social Security number 

  • Your previously expired EAD card because lenders assume USCIS will renew your DACA status 

  • Your current EAD card from USCIS 

You will also have to prove you have a stable income and show an account balance to prove you can afford to buy a home.