Mortgage
Trump Signs Executive Order to Cut Several Mortgage Costs for Homebuyers
By Real Estate Wire Staff, . Real Estate Wire.
President Donald Trump signed an executive order Thursday directing multiple federal agencies to reduce costs for homebuyers and mortgage borrowers, National Mortgage News reported.
The broadest piece of the order targets mortgage insurance, the premium borrowers pay to protect lenders when they put less than 20% down. The order directs the Federal Housing Finance Agency, known as the FHFA, to create a pilot program that would automatically cancel that insurance on certain future loans when a home's value has risen enough. The FHFA regulates Fannie Mae and Freddie Mac, the government-controlled companies that back more than half of all US residential mortgages. The pilot is limited to future mortgages, so existing borrowers would receive no immediate relief.
The order also directs the Departments of Agriculture and Veterans Affairs, both of which run direct home loan programs, to lower the interest rates on the single-family mortgages they issue. And it converts an existing title insurance pilot into a permanent program: lenders working with Fannie Mae and Freddie Mac can use an automated title review in place of a traditional title insurance policy on certain refinance transactions. Title insurance protects lenders and buyers against ownership disputes on a property. National Mortgage News noted that few borrowers are refinancing at current rates, but the change could benefit lenders if rates fall.
A fourth piece of the order creates a task force on manufactured housing costs, to be co-chaired by the Secretary of Housing and Urban Development and the FHFA director.
"The American Dream of homeownership is a vital pillar of our great country. It is the policy of my Administration to reduce regulatory barriers to mortgage origination and costs impeding homeownership," the order stated, as quoted by National Mortgage News.
The order arrives as the housing market is showing serious strain. Building permits, housing starts, and pending home sales for September all came in well below what economists had forecast, National Mortgage News reported, with mortgage rates above 7% bringing transactions close to a halt. The 30-year fixed rate hit 7.32% this week, according to the report.
FHFA Director Bill Pulte signaled that additional changes may follow. In a social media post Saturday, Pulte said the agency is studying whether to require only one or two credit reports per mortgage application rather than the current standard of three, a shift that could reduce costs for borrowers. "We are studying the usage of just one or two credit reports to bring even more savings than we already have to American consumers," he said, as quoted by National Mortgage News. Pulte also said the agency is reviewing loan-level pricing adjustments, fees that Fannie Mae and Freddie Mac charge lenders based on a borrower's credit profile and down payment, and expects to announce a decision before year end.
The practical effect of Thursday's order depends heavily on implementation. The mortgage insurance pilot is limited to future loans. The title insurance change applies only to refinances, a thin slice of the market right now. And directing Agriculture and Veterans Affairs to lower their loan rates is a directive, not a rate cut: the agencies will need to act on it.
What the order does not establish is how quickly any of these programs will be designed, tested, and opened to borrowers, or how many people will qualify. The manufactured housing task force has no announced timeline. For buyers struggling with affordability today, the more immediate variable remains the 30-year fixed rate, which no executive order directly controls.
The near-term signals worth tracking are the two items Pulte flagged. If the FHFA moves to a one-or-two-bureau credit report pull, any cost savings would apply to new borrowers broadly, not just those in a pilot. His stated year-end deadline on loan-level pricing adjustments is the other concrete marker to watch.
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