President Donald Trump has signed an executive order aimed at lowering the cost of buying and owning a home, directing federal agencies to cancel mortgage insurance premiums for qualifying borrowers, slash closing costs on refinances and expand factory-built housing.
Photo: David E. Lucas, Public domain, via Wikimedia Commons
The order, titled "Decreasing Housing Costs For The American People," was signed on Thursday. Its centerpiece directs the Federal Housing Finance Agency to launch a pilot program under which Fannie Mae and Freddie Mac will proactively review loans and cancel borrowers' mortgage insurance premiums once they have built enough equity based on current market values — with no application required from the homeowner. The White House says the change "will eliminate a large monthly expense for qualifying Americans."
The order also makes permanent an FHFA pilot that waives title insurance on refinanced mortgages, a step meant to lower closing costs for homeowners who refinance. And it creates a Task Force on Manufactured Housing Innovation, co-chaired by FHFA Director Bill Pulte and Housing and Urban Development Secretary Scott Turner, to expand the use of cheaper factory-built homes in federal housing programs.
Two cabinet departments are directed to cut borrowing costs directly: the Agriculture and Veterans Affairs secretaries must reduce interest rates on the single-family home loans their departments issue, which serve rural borrowers and veterans.
The timing is no accident. Pending home sales in the United States recently hit a record low, and 30-year mortgage rates remain stuck above 7 percent, locking many first-time buyers out of the market. Trump signed the order less than two weeks before the November 3 midterm elections, as housing affordability ranks among voters' top economic concerns. The National Association of Realtors applauded the move.
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An executive order cannot set mortgage rates, which follow bond markets, and many of the measures will take months to work through agency rulemaking. But for borrowers who qualify for the insurance-premium cancellation alone, the savings could run to hundreds of dollars a month — the kind of kitchen-table number the White House is eager to talk about before Election Day.