Officials in the Trump administration have drafted an executive order aimed at reducing mortgage costs, saying that many Americans have been “locked out of homeownership” over the past two decades.
The order, which has yet to be signed, comes as industry forecasts point to a sluggish mortgage market heading into 2027 under a higher-for-longer interest rate environment, with affordability pressures looming ahead of the midterm elections.
The draft order calls for policy actions across several areas, including mortgage insurance cancellation, the creation of a federal task force on manufactured housing innovation, initiatives to lower refinance costs, and reductions to interest rates for direct loans through the U.S. Department of Agriculture (USDA) and Department of Veterans Affairs (VA).
“Unnecessary regulatory requirements for borrowers and outdated mortgage origination processes have driven up closing costs and made homeownership unaffordable,” the draft order states.
The administration said it plans to reduce regulatory barriers to mortgage origination, embrace “innovative risk and value assessment technologies,” and promote greater competition and innovation in housing finance.
Rumors that an executive order was imminent circulated last week during the Mortgage Bankers Association’s Annual Convention & Expo in Chicago. Attendees expected Federal Housing Finance Agency (FHFA) Director Bill Pulte to discuss potential initiatives on stage, but he canceled his appearance to travel with Trump.
HousingWire gained access to a draft of the executive order on Monday evening from three different sources.
Reducing mortgage costs
The draft order includes initiatives Pulte previously previewed, including directing Fannie Mae and Freddie Mac to periodically review automated valuation models (AVMs) and other property data to proactively identify borrowers eligible to cancel their private mortgage insurance (PMI).
“The Director shall direct the Enterprises to require servicers, to the extent permitted by law and operationally feasible, to notify borrowers promptly when mortgage insurance may be cancelled,” the draft reads, adding that the FHFA should work “to reduce or eliminate unnecessary documentation requests, appraisal costs, and other administrative barriers to cancellation.”
The draft also takes aim at refinance costs. It calls for expanding Fannie Mae’s title waiver pilot program launched in 2024 into a permanent nationwide initiative, with additional certified providers, and evaluating whether to extend eligibility to refis with loan-to-value (LTV) ratios above the current 80% threshold where title risk remains low.
Additionally, it directs the FHFA to waive appraisals, income reverification and other documentation requirements for limited cash-out refinances that lower a borrower’s monthly payment — provided existing enterprise data supports doing so. It also calls for reducing or eliminating loan-level price adjustments (LLPAs) and other GSE fees on these transactions.
“The Director shall require that cost savings resulting from the program be passed through to borrowers and that lenders inform borrowers of those savings,” the draft states.
For government lending programs, the order directs the USDA and the VA to lower the interest rates charged on single-family home loans originated directly by their respective departments.
Supply side encouragement
On the supply side, the draft establishes a Task Force on Manufactured Housing Innovation co-chaired by the Secretary of the Department of Housing and Urban Development (HUD) and the FHFA director, or their designees, with membership that also includes the secretaries of agriculture, commerce and veterans affairs.
Within 180 days, the panel would be required to submit recommendations to facilitate modern manufacturing methods for factory-built housing eligible for federal programs.
The task force would focus on eliminating duplicative reviews, encouraging modern construction methods, boosting affordable housing production and evaluating whether federal housing grants can be tied to local permitting reform.
“The Task Force shall also evaluate whether, and under what existing statutory authorities, Federal grant funding may be conditioned on State and local adoption of standardized permitting and licensing for factory-built housing, consistent with best practices,” the draft reads.
