WASHINGTON — President Donald Trump on Thursday signed an executive order aimed at reducing the cost of owning a single-family home, directing agencies to cut mortgage insurance premiums for some borrowers, lower refinancing costs and reduce interest rates on certain government-backed loans, according to Reuters.
The order directs the Federal Housing Finance Agency to launch a pilot program that would proactively cancel borrowers’ mortgage insurance premiums once they meet equity requirements based on current market values, according to Reuters. It also makes permanent an FHFA pilot program waiving title insurance requirements for mortgage refinancings — a change the White House says is meant to cut closing costs for homeowners who refinance.
Two other parts of the package look beyond conventional mortgages. The order establishes a task force on manufactured housing innovation, charged with expanding the factory-built homes that are eligible for federal housing programs. And it directs the secretaries of agriculture and veterans affairs to reduce interest rates on single-family home loans issued by their departments, which serve rural borrowers and veterans respectively, according to Reuters.
The move comes as affordability has become a political vulnerability for Republicans ahead of the November midterm elections. Contracts to buy previously owned homes plunged to a record low in September as rising mortgage rates depressed demand, according to the National Association of Realtors, cited by Reuters. Single-family housing starts fell 4.6% in September, while permits for future construction dropped 4% to their lowest level in three and a half years.
Borrowing costs remain the central problem the order cannot directly solve. The average 30-year fixed mortgage rate reached 7.40% last week, the highest in about three years, before easing to 7.32% this week, according to Freddie Mac figures cited by Reuters. Mortgage rates track the 10-year Treasury yield, which has fallen by more than a quarter of a percentage point in the last two weeks, but remains far above the levels that unlocked a wave of buying and refinancing earlier in the decade.
Why it matters: the order’s tools — insurance cancellation, title waivers, manufactured housing and departmental loan rates — can save individual borrowers money at the margins, but they do not add housing supply or set market interest rates. What happens next will be visible in how quickly FHFA designs the insurance pilot, which borrowers qualify under current-value equity tests, and whether the manufactured-housing task force produces homes that local zoning will actually accept.
Read the original reporting in Reuters via WIXX.
