Right now, the Federal Housing Authority is making it harder for immigrants to
live in America. Regardless of whether you agree with the ideology behind this, it is
important to recognize that such a significant policy shift will have far-reaching
economic consequences—and we’ll feel some of them right here in Mendocino County.

     As a real estate broker, I am focused on a new rule affecting FHA home loans. In
April, the Department of Housing and Urban Development revised its residency
requirements and removed access for many immigrants to FHA-insured mortgages by
eliminating in its entirety the “non-permanent residents” category from the Title I and
Title II programs, effective May 25.

     This means that people here on a legal work visa are no longer eligible for FHA
loans, which are the loans that help many people become first-time homebuyers. FHA
loans only require a down payment of 3.5% of the purchase price, as opposed to
conventional loans, which typically require a 20% down payment.

     Limiting the number of people who can afford to own property in the Ukiah Valley
is good news for buyers, but bad news for sellers. If you’re in the market to buy a home,
less competition means lower prices. If you’re trying to sell your house, fewer buyers
now qualify for the home loans that would allow them to buy your property.

     It's possible that other lenders—conventional banks or credit unions—will
respond to the FHA rule by stepping into the void, relaxing eligibility requirements to
help immigrants qualify for home loans. However, if conventional lenders lower their
down payment requirements, they will almost certainly increase interest rates and/or
require private mortgage insurance. As down payments get smaller, the lender’s risk
gets bigger.

     According to the Department of Homeland Security, California has more
unauthorized residents than any other state. Mendocino County has a substantial
number of immigrants, many of whom may not be documented but who have lived and
worked here for years. FHA loans were never available to immigrants who were in the
country illegally, only to those who were following the rules.

     There is no doubt that if those with work visas lose access to FHA loans, it could
negatively affect our community. Work visas are generally approved for people with
skills and specialties that we cannot recruit locally (for example, to help with the
shortage of doctors, nurses, teachers, etc.). Other immigrants in our valley, documented
or not, often contribute positively to our community, doing jobs that not everyone wants
to do.

     I welcome anyone who wants to contribute to the prosperity of our community
and our country. If we do not welcome immigrants, we may see a reduction of available
labor, particularly blue-collar labor such those who work in agriculture, food service,
domestic work, automotive, hospitality, and lumber—jobs often held by first-generation
immigrants.

     It’s too bad that our country doesn’t have an immigration policy that makes it
easier for hard-working, law-abiding people to come here legally. I’m all for removing
bad actors, but according to a Stanford University study published by the Institute for
Economic Policy Research, the idea that immigrants drive up crime rates hasn’t been
the case in America for the last 140 years.

     When decisions are made solely based on ideology and not on economics, we all
pay the price.

     If you have questions about property management or real estate, please contact
me at [email protected] or call (707) 462-4000. If you have an idea for a future
column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s
Bakery.

     Dick Selzer is a real estate broker who has been in the business for more than
45 years. The opinions expressed here are his and do not necessarily represent his
affiliated organizations.