President Trump signed an order to cut some of the monthly fees and closing costs that make owning a home so expensive, as voters press for relief on housing costs.
Story Highlights
- A pilot program would end mortgage insurance on new loans once owners have built enough equity.
- Some refinances could get cheaper through an automated title review in place of costly title insurance.
- The Agriculture and Veterans Affairs departments are told to lower rates on the home loans they make directly.
- A new task force will look for ways to cut the cost of factory-built homes.
- Mortgage insurance protects the lender, not the owner. Under the order’s pilot, it would be canceled once the owner has enough equity, without the owner having to ask.
What President Trump’s Executive Order Does
President Trump signed the executive order on Thursday, October 22. The order says it is the administration’s policy to clear away rules and costs that stand between families and a home of their own. It comes as the administration faces voter worries about affordability ahead of the midterm elections, according to reports. Mortgage rates have stayed above 7 percent, and new housing numbers for September came in well below what economists expected.
The order gives jobs to several agencies. The Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, is told to test ending mortgage insurance sooner and to grow a program that cuts title costs on refinances. Fannie Mae and Freddie Mac back more than half of all home loans in the country. The Agriculture and Veterans Affairs departments are told to lower interest rates on single-family loans they make themselves. A new Task Force on Manufactured Housing Innovation, led by the Housing and Urban Development Secretary and the housing finance agency’s director, will look at factory-built homes.
How Ending Mortgage Insurance Could Save Families Money
Mortgage insurance is a monthly charge many buyers pay when they put down less than 20 percent. It protects the lender, not the owner. Under the pilot, Fannie Mae and Freddie Mac would check loans from time to time. When a home’s current value shows the owner has enough equity, the insurance would be canceled without the owner having to ask. Equity is the share of the home the owner truly owns, after the loan balance.
The order says home values would be judged by an automated valuation model, a computer estimate of what a home is worth, or another method the agency approves. Servicers, the companies that collect loan payments, must tell owners quickly and cut down on paperwork and appraisal costs. The pilot covers only mortgages made after it starts, so it will not change loans people already have. The order does not set the equity level, and the agency still has to write the rules.
Cheaper Refinances With Faster Title Reviews
Refinancing can lower a monthly payment, but closing costs keep many owners from doing it. One of those costs is title insurance, which covers the lender if an old claim on the property turns up later. The order tells the agency to grow an existing test program into an ongoing one, open nationwide through both Fannie Mae and Freddie Mac. On eligible refinances, they could accept an automated title review in place of a lender’s title insurance policy.
The order says any savings must be passed on to borrowers, and lenders must tell borrowers about them. The agency’s director is also asked to consider waiving appraisals for some refinances that lower the monthly payment and to cut certain loan fees. The step covers refinances, not home purchases, and it moves ahead only if the director finds it safe and in the public interest. With 30-year rates above 7 percent, refinancing has slowed, so this help would matter most if rates fall.
Help for Rural Borrowers, Veterans and Factory-Built Homes
The Agriculture Department makes some home loans directly to rural families, and the Veterans Affairs Department does the same for some veterans. The order tells both to lower the rates on those single-family loans, as the law and their budgets allow. The order does not set a new rate or a start date, so borrowers will need to watch for word from each department on who qualifies and how much they could save.
Manufactured homes are built in a factory and moved to the land, and they often cost far less than homes built on site. The task force, which also includes the Agriculture, Commerce and Veterans Affairs departments, must send the President ideas within 180 days. Those ideas include common building specs, fewer repeat federal reviews and ways to help states and towns speed up permits. The goal is more homes that young couples, veterans and retirees can actually afford to own.
What to Watch Next
The savings reach kitchen tables only when the agencies act. The housing finance agency must design the mortgage insurance pilot and decide on the title program. The Agriculture and Veterans Affairs departments must set their new rates. The task force has until April 2027 to deliver its plan. Homeowners and buyers can watch for the eligibility rules and the real dollar savings as each piece rolls out.
Sources:
whitehouse.gov, whitehouse.gov fact sheet, reuters.com, insurancejournal.com
