H-1B Visa Holders Struggle with New Barriers to Homeownership
H-1B visa holders face significant hurdles in the US housing market as access to FHA loans is restricted, impacting their ability to purchase homes and reshaping opportunities for skilled immigrants.
H1b VisaFha LoansHomeownershipImmigration PolicyHousing MarketReal Estate NewsOct 16, 2025
As per a recent executive order from the Trump administration, the number of FHA-backed mortgages granted to non-permanent residents has plummeted to near zero. The decline follows a policy announcement made in a March 26 letter by the Department of Housing and Urban Development (HUD), which stated that as of May 25, non-permanent residents, including those on employment-based H-1B visas, would no longer be eligible for FHA-insured loans.
The move, HUD wrote, is “in line with President Donald Trump’s commitment to safeguarding economic opportunities for US citizens and lawful permanent residents,” adding that “federal benefits, including access to FHA-insured mortgages, are reserved for individuals who hold lawful permanent resident status.” The effects were swift and severe. According to a new report by John Burns Research & Consulting, non-permanent residents (NPRs) made up less than 1 percent of FHA loan volume in June, down from over 6 percent just two months earlier in April. By July and August, the number had effectively hit zero, the lowest since JBREC began tracking this data in 2018.
“New FHA mortgages to NPRs have dropped to near-zero following a rule change in May,” wrote JBREC expert Alex Thomas on X. “NPRs made up 4 per cent of FHA loan volume nationally in 2024; more in some markets, especially in Florida.” Now, unable to access FHA-insured financing, NPRs must turn to conventional mortgage options, which are not backed by the federal government and come with stricter requirements, including strong credit scores, US-based income, and documented employment history. Many non-permanent residents, despite being legally employed and contributing to the economy, struggle to meet these thresholds.
“The number of FHA loans going to non-permanent residents has dropped mostly because they’re just not buying anymore,” Thomas noted. The exclusion is proving especially burdensome for younger and first-time homebuyers, and in regions where NPRs made up a significant share of the market, like parts of Florida, the ripple effects are growing. Eric Finnigan, another JBREC analyst, warned on X that the policy is squeezing “entry-level homebuying in some key housing markets already dealing with weak sales & too much supply.”
At the same time, the Trump administration’s immigration crackdown is intensifying on multiple fronts. A recent presidential proclamation introduced a one-time, $100,000 application fee for H-1B visa holders, further straining the attractiveness of the US as a destination for global talent. Critics say this approach threatens not only immigrant workers but also the American businesses that rely on them.
“The executive order stifles a legal immigration program on which many American businesses depend, with effects that benefit Americans and the US economy,” said Jennie Murray, President and CEO of the National Immigration Forum, in a statement to Newsweek. The housing policy change is only the latest blow. H-1B visa holders are already tightly restricted: they may only work for the specific employer listed on their visa. No side gigs. No second jobs. No real estate income. For those on F-1 student visas, the limitations are even stricter, no employment beyond narrowly defined academic-related work.
Frequently Asked Questions
What is an H-1B visa?
An H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as science, engineering, and IT.
Why are H-1B visa holders no longer eligible for FHA loans?
The Trump administration issued a policy change in March 2023, stating that non-permanent residents, including H-1B visa holders, are no longer eligible for FHA-insured loans as part of a broader effort to prioritize economic opportunities for US citizens and lawful permanent residents.
What are the alternatives for H-1B visa holders to purchase a home?
H-1B visa holders must now turn to conventional mortgage options, which typically have stricter requirements, including higher credit scores, US-based income, and a documented employment history.
How has this policy change affected the housing market?
The policy change has led to a significant drop in FHA loans to non-permanent residents, particularly impacting first-time homebuyers and regions with a high concentration of H-1B visa holders, such as parts of Florida.
What other restrictions do H-1B visa holders face?
H-1B visa holders are restricted to working only for the specific employer listed on their visa. They cannot take on side gigs, second jobs, or earn income from real estate. F-1 student visa holders face even stricter limitations, allowing employment only in narrowly defined academic-related work.
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