Trump housing order limits proposed insurance pilot to future mortgages

President Donald Trump signed an executive order on 22 October aimed at lowering US housing costs, but its proposed mortgage-insurance pilot would cover only loans made after the pilot begins. People with existing mortgages would not qualify for that new programme, and the order does not itself start it.

The director of the Federal Housing Finance Agency (FHFA) must first decide whether the pilot would serve the interests of Fannie Mae and Freddie Mac or the agency, as well as the public. If it goes ahead, the two mortgage-finance companies would use property valuations and other data to identify borrowers who might qualify to stop paying mortgage insurance. Cancellation would still depend on sufficient equity, payment history and other legal and contractual requirements.

The White House’s accompanying fact sheet says the measure “will eliminate a large monthly expense” for qualifying Americans, but does not mention the restriction to future loans. Existing borrowers may still be able to cancel mortgage insurance under current rules; they would not be covered by this particular pilot.

A separate part of the order could widen an existing programme that lets Fannie Mae and Freddie Mac accept an FHFA-approved title-risk assessment instead of a lender’s title insurance policy on eligible refinances. That expansion also requires a favourable decision from the FHFA director. Proposals to relax some eligibility, documentation and fee requirements are matters for the director to consider, not changes already made. Any savings from the expanded programme would have to be passed on to borrowers.

There is some experience to draw on: HousingWire reports that Fannie Mae estimates its existing title-alternative initiatives have saved borrowers about $25 million over roughly 18 months. The American Land Title Association, which represents the title industry, has warned that efforts to cut costs must not shift significant financial risks onto homeowners or the wider housing-finance system.

The order also establishes a task force to recommend changes affecting factory-built homes within 180 days. It instructs the agriculture and veterans affairs departments to lower rates on housing loans they make directly, subject to the law and available funding. It sets no new rate or start date for those reductions, or a date for either FHFA programme to begin or expand.