Trump Signs Executive Order to Lower Mortgage Costs and Expand Homeownership

-Editorial

President Donald Trump signed an executive order Oct. 22 aimed at reducing mortgage costs, expanding homeownership opportunities and encouraging innovation in the housing industry through changes to mortgage insurance, refinancing requirements and manufactured housing regulations.

The order directs federal agencies to identify ways to reduce housing expenses, simplify mortgage transactions and increase competition while maintaining financial safeguards.

A central provision calls for a pilot program allowing eligible homeowners to have mortgage insurance canceled automatically once they meet established equity and financial requirements.

Under the proposal, the Federal Housing Finance Agency would oversee efforts by Fannie Mae and Freddie Mac to review mortgage loans periodically using automated property valuations and other financial information.

The program would apply only to mortgages originated after its establishment and would require approval from the agency’s director.

Private mortgage insurance is generally required on conventional loans when borrowers make down payments below 20%. Eliminating the insurance when homeowners qualify could reduce monthly mortgage payments.

The order also seeks to reduce documentation requirements, appraisal expenses, and administrative barriers associated with insurance cancellation. Mortgage servicers would notify borrowers when they become eligible.

Another provision targets title insurance expenses, particularly for homeowners refinancing existing mortgages.

The administration is directing the Federal Housing Finance Agency to consider expanding an existing title acceptance pilot program nationwide through Fannie Mae and Freddie Mac.

Under the proposal, approved automated title assessments could replace traditional lenders’ title insurance policies for qualifying refinance transactions.

The agency would also consider expanding eligibility, removing geographic restrictions and reducing appraisal, income verification and other documentation requirements for certain refinancing transactions that lower monthly payments.

Any resulting savings would be required to reach borrowers.

The executive order also establishes a Task Force on Manufactured Housing Innovation to examine ways to reduce construction costs and expand affordable housing production.

Co-chaired by the Department of Housing and Urban Development and the Federal Housing Finance Agency, the task force would include representatives from the departments of Agriculture, Commerce and Veterans Affairs.

Within 180 days, the group must submit recommendations addressing federal permitting requirements, construction standards, inspections and certification procedures.

The task force will examine opportunities to eliminate duplicative regulations, encourage modern manufacturing techniques and improve coordination among federal housing programs.

It will also evaluate whether federal funding could encourage state and local governments to adopt standardized permitting procedures for manufactured and factory-built homes.

Additionally, Trump directed the departments of Agriculture and Veterans Affairs to reduce interest rates on single-family housing loans issued directly by their agencies, subject to federal law and available funding.

The order does not specify the amount of those reductions or establish an implementation timetable.

Several measures require additional agency decisions before taking effect. The administration also did not provide estimates of potential savings or the number of households expected to benefit.

Implementation remains subject to existing legal authorities, financial safety requirements, and available congressional appropriations.