Trump Housing Order Directs Pilot for Automatic Mortgage Insurance Cancellation
President Donald Trump signed an executive order on Oct. 22 that directs federal agencies to cancel private mortgage insurance automatically on eligible future loans and to make refinancing cheaper, CNBC reported.
The savings for borrowers will depend on rules that have not yet been written.
The order is titled Decreasing Housing Costs for the American People. It was signed less than two weeks before the Nov. 3 midterm elections, and it builds on earlier orders restricting Wall Street firms from buying single-family homes.
How the Mortgage Insurance Pilot Would Work
Yahoo Finance reported that the order tells the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, to create a pilot program. It would drop borrowers' mortgage insurance premiums automatically once they have enough equity in the home.
Borrowers who put down less than 20% typically pay this insurance to qualify for a conventional loan. They can now ask their lender to cancel it at 20% equity, and lenders must drop it at 22%. The pilot would streamline that process.
Freddie Mac estimates the premiums at $30 to $70 a month per $100,000 borrowed. On a $300,000 loan, that works out to $90 to $210 a month. The trade group U.S. Mortgage Insurers says premiums have fallen 25% since 2017.
Urban Institute data show 36% of conventional borrowers paid the insurance in 2024, up from 25.4% in 2016.
Refinancing, Title Insurance and Other Provisions
The order also expands a pilot that waives title insurance on certain refinancings. It directs FHFA to consider eliminating other refinancing expenses, easing documentation requirements and widening alternatives to traditional title insurance.
Appraisal requirements are also covered.
Other provisions would lower rates on the small number of home loans made directly by the Department of Veterans Affairs and the Department of Agriculture. A federal task force would work on manufactured housing construction.
Freddie Mac's latest survey, as of Oct. 23, put the average 30-year fixed mortgage rate at 7.32%, down from 7.40% a week earlier. That is still high enough that many owners have little reason to refinance, and rates near 7.4% have weighed on buyer demand.
The order aims at fees that add to a loan's cost whatever the rate.
What Borrowers Should Know About the Savings
FHFA Director Bill Pulte said millions of Americans will save thousands of dollars. Keith Gumbinger, vice president of the mortgage website HSH, told CNBC it is hard to judge the effect on consumers without more details.
Whether savings reach borrowers will turn on how FHFA implements the order, whether Fannie Mae and Freddie Mac take part, and which eligibility rules are adopted.
A lender trade group, CHLA, said its lender members welcome the steps on refinancing costs and manufactured housing.