executive order

Housing Costs, Refinancing and Title: A Look at the New Executive Order

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On October 22, 2026, President Trump issued an executive order that directs various agencies of the Government to develop new policies and programs with the stated intention of lowering the cost of home ownership. The Order outlines several measures intended to address these costs, including the following:

Automatic Removal of Private Mortgage Insurance

The Order directs Fannie Mae and Freddie Mac to develop pilot programs for new loans that provide for the automatic cancellation of private mortgage insurance (PMI). Cancellation would be based on periodic evaluations of the collateral’s current fair market value using “automated valuation models and other data.”

Lenders typically require PMI when the amount of the loan exceeds 80% of the value of the collateral at the time of origination, because these loans go into default at greater rates than other loans.  The insurance is intended to offset any loss the lender might suffer if it is forced to foreclose on the property.  The borrower bears the cost of the insurance, which is collected as a portion of the monthly mortgage payment.

Current federal guidelines dictate that the lender must remove PMI from a loan once the scheduled payments cause the loan to value ratio to fall under a certain threshold, but this determination is generally calculated based on the schedule of payments and the value of the property at origination.

The Executive Order seems to contemplate using algorithm-based computer modeling of property values to assess the real time loan to value ratio at certain points of time1. In markets where property values are increasing, regular assessments of property values should shorten the period where borrowers have to beat the cost of PMI. However, the necessary tradeoff of such a policy would be a shift of risk to Fannie and Freddie.  The consistency and reliability of automated property valuation tools are still uncertain.   Perhaps more importantly, those that remember past real estate market crashes know that  property values are capable of depreciating rapidly.  When Fannie and Freddie sustain losses (and sometimes private lenders) that tends to come out of the pockets of the taxpayer.  

Standardization of Manufactured and Modular Housing Permitting and Financing

The Executive Order next mandates the creation of a “Task Force on Manufactured Housing Innovation” for the purpose of arriving at unified federal regulations and standards for mobile and modular homes that will be consistent across all government agencies.  The Order also contemplates that the task force work towards a single standard for underwriting federal-backed loans on such housing. The task force is also tasked with incentivizing state governments to adopt uniform standards in this same realm.  The goal seems to be to promote and encourage all forms of factory constructed housing in an attempt to make the growing industry more commercially viable and friendly to the consumer.

Expanding Existing Pilot Programs Allowing Alternatives to Title Insurance on Refinances

The Executive Order specifically authorizes the Director of the FHFA, which oversees Fannie and Freddie, to expand and make permanent existing pilot programs that allow substitutes for title insurance policies on refinance transactions. This blog previously discussed Attorney Opinion Letters as one such alternative.   Notably, the current order specifically references the possibility of accepting an “automated title review” as another alternative to a title insurance policy.  The language of the Order reveals the Administration’s possible receptiveness to title reviews and opinions to be carried out by artificial intelligence. While the Executive Order itself does not change any existing standards, the direction to the FHFA seems pretty clear.

In addition to the provisions concerning title insurance, this section of the Order also instructs the Director to consider waiving appraisals, income verification, and certain fees for some types of cash out refinances.

Reduction of Interest Rates on VA and USDA Loans

The Executive Order finally directs the VA and USDA to lower interest rates on certain loans that it issues directly to borrowers.  The most straightforward of all the provisions of the Order, the reduction of interest rates undoubtedly would be the most impactful in reducing the overall cost to the borrower.  Unfortunately, the pool of VA and USDA direct to consumer loans is unlikely to make a significant impact in overall market costs and availability. 

The executive order sets the direction, but it does not by itself rewrite the rules of the market. The details will come from FHFA, Fannie Mae, Freddie Mac and the other federal agencies charged with carrying it out.

If these initiatives move forward, real estate professionals would eventually see meaningful changes in three places: how quickly homeowners can shed mortgage insurance, how streamlined a refinance can become, and how easily manufactured and modular housing can move through the approval and financing process.

Those changes won’t happen overnight. But they are certainly worth keeping an eye on.

1Zillow is an example of a consumer based valuation tool in this space, but there are many other products in this space.

One of President Trump’s first official actions affects housing

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The Federal Housing Administration (FHA) announced on January 9 that it planned to reduce mortgage insurance premiums effective January 27. Mortgage insurance protects lenders from borrower defaults and is common where the down payment is less than 20%.

The Democratic view of this issue is that sufficient reserves and four years of economic growth allowed the FHA to pass along some modest savings to consumers. Additionally, the move was viewed as an attempt to help first-time and lower income home buyers to access the market at a time when mortgage rates were rising.

The Republican view is that such reductions put taxpayers at risk by decreasing the funds the FHA has to deal with mortgage defaults. In other words, taxpayers might be at a greater risk for footing the bill for another bailout if FHA’s reserves were reduced.

President Trump’s advisors criticized the Obama administration for adopting new policies as it prepared to leave office. During Dr. Ben Carson’s confirmation hearing for Secretary of the Department of Housing and Urban Development (HUD), FHA’s parent agency, he expressed disappointment that the cut was announced so late in President Obama’s term.

On January 20, shortly after he was sworn in, as one of his first substantive actions, President Trump undid this new policy before it took effect by signing an executive order.

HUD then issued a letter stating that more analysis is needed before changes are made, and the rates will remain the same for the time being.

It appears industry groups may have differing opinions on whether President Trump’s executive order will affect home buying. Will this action reduce opportunities for first-time buyers? Or will it eventually allow FHA’s reserves to be increased to a point where it can offer more services to borrowers? Industry groups will continue to weigh in, and this blog will continue to keep South Carolina dirt lawyers posted on developments.