Trump Signs Executive Order Aimed at Cutting Mortgage and Homeownership Costs
President Trump signed an executive order on Thursday directing federal agencies to cut homeownership costs through a mortgage insurance cancellation pilot, cheaper refinancing, and lower rates on certain government-backed home loans.
President Donald Trump signed an executive order on Thursday aimed at reducing the costs of owning a single-family home, directing federal agencies to lower insurance premiums, refinancing costs and interest rates on certain government-backed home loans, Reuters reported.
What the order does
The order instructs the director of the Federal Housing Finance Agency to create a pilot program that would proactively cancel borrowers’ mortgage insurance premiums once they meet equity requirements based on the current market value of their homes. The White House said the move would eliminate a large monthly expense for qualifying Americans.
It also makes permanent an FHFA pilot program that waives title insurance requirements for mortgage refinancings, a change the White House said would reduce closing costs and the monthly expenses tied to homeownership.
The order creates a task force on manufactured housing innovation, to be co-chaired by the housing secretary and the FHFA director, to expand factory-built homes eligible for federal housing programs and to promote modern manufacturing methods in homebuilding. It also directs the secretaries of agriculture and veterans affairs to reduce interest rates on single-family home loans made by their departments. The White House framed the package as a way to cut red tape and bring the cost of homeownership down, a factor worth weighing for households comparing what renting and buying a home each cost.
A market under strain
The order arrives as the housing market shows clear signs of stress. Contracts to buy previously owned U.S. homes fell to a record low in September, according to the National Association of Realtors, while single-family housing starts fell 4.6 percent and permits for future construction dropped 4 percent to their lowest level in three and a half years.
The average 30-year fixed mortgage rate reached 7.40 percent last week, the highest in about three years, before falling to 7.32 percent this week, according to Freddie Mac. The yield on the 10-year Treasury note, which acts as a pricing benchmark for mortgages, has fallen by more than a quarter percentage point in the last two weeks.
High home prices and elevated rates have put pressure on the administration to deliver relief, and affordability has become a political vulnerability for Republicans ahead of the November midterm elections, Reuters reported.
Reporting based on coverage by Reuters and the White House.
