Trump Orders Steps to Cut Home Buying Costs
An executive order asks Fannie Mae and Freddie Mac to test canceling mortgage insurance automatically once owners have enough equity, makes a cheaper alternative to title insurance permanent for refinancing, and tells the Agriculture and Veterans Affairs departments to cut rates on the home loans they make. Existing mortgages are outside the insurance test, and the housing regulator decides whether each step goes ahead.
President Trump signed an executive order aimed at the monthly and closing costs of owning a home. It directs the head of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, to have the two companies set up a pilot that regularly checks the loans they back and cancels a borrower's mortgage insurance once the home's current market value shows the borrower has enough equity. Mortgage insurance protects the lender if a borrower defaults, and homeowners with at least 20% equity typically do not need it. The pilot covers only mortgages made after it starts.
The order also turns a test program into a permanent, nationwide one that lets some refinancing borrowers use an automated title review instead of a lender's title insurance policy, with savings passed on. The Agriculture and Veterans Affairs departments are told to lower rates on the single-family home loans they make directly.
A task force has 180 days to recommend ways to make factory-built homes cheaper and faster to approve. The housing agency's steps depend on its director finding them in the public interest. Analysts at the investment bank Keefe, Bruyette & Woods expect the order's effect on the broader market to be limited.
President Trump has ordered a set of changes meant to cut what Americans pay to insure, refinance and build a home, from the insurance many borrowers carry on their loans to the rates on government home loans.
Mortgage insurance
Under the order, the director of the Federal Housing Finance Agency, Bill Pulte, is to direct Fannie Mae and Freddie Mac, if he finds it in their interest and the public's, to create a pilot program that periodically reviews the single-family loans they own, guarantee or securitize. Using automated valuation models and other data, the companies would identify borrowers whose equity, based on the home's current market value, meets the requirements for canceling mortgage insurance, and cancel it without waiting to be asked.
The White House says this "will eliminate a large monthly expense for qualifying Americans." The pilot applies only to mortgages made after it is set up, and each cancellation must also meet safety-and-soundness standards, payment-history requirements and the companies' contracts. Loan servicers are to tell borrowers promptly when their insurance may be canceled and cut unnecessary paperwork and appraisal costs.
Cheaper refinancing
The order tells the agency to expand an existing title-acceptance pilot into an ongoing, nationwide program at both companies, under which an automated title review or other approved check can take the place of a lender's title insurance policy on eligible refinances. The director is to consider raising the current 80% loan-to-value limit where title risk stays low, removing geographic limits, waiving appraisals and income checks for some refinances that lower a monthly payment, and cutting fees. Savings must be passed on to borrowers.
Keefe, Bruyette & Woods analysts wrote that the pilot now operates in only a few regions and only for eligible refinances, which account for about 7% of title insurance premiums, so they expect the effect on title insurers to be limited unless it is broadened to home purchases.
Factory-built homes and government loans
A Task Force on Manufactured Housing Innovation, co-chaired by the Housing and Urban Development secretary, Scott Turner, and the housing agency's director, has 180 days to recommend ways to bring modern manufacturing methods to factory-built homes eligible for federal programs and to remove federal requirements that slow standardized production. It is also to study whether federal grants can encourage states and cities to adopt standard permitting for such homes. The Agriculture and Veterans Affairs secretaries are told to reduce interest rates on the single-family home loans their departments make directly, within existing law and funding.
Reaction
Brendan McKay of the Broker Action Coalition said proactive cancellation "will keep real money back into families' pockets every month." Bob Broeksmit, chief executive of the Mortgage Bankers Association, said lenders "welcome these latest initiatives to reduce the costs of refinancing and expand innovative manufactured housing options." The order itself gives no estimate of savings; Pulte posted on X that it could save "thousands" of dollars for millions of Americans.
What stays the same
The order changes no law and creates no right a borrower can enforce in court. Existing mortgages are outside the insurance pilot, and the housing agency's director decides whether the mortgage-insurance and title steps go ahead. The order builds on earlier ones this year, including a January order meant to stop large institutional investors from buying single-family homes.