FHFA

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.

Conforming loan limit to increase in 2024

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The Federal Housing Finance Agency (FHFA) issued a press release on November 28 announcing the conforming loan limit values for Fannie Mae and Freddie Mac mortgages in 2024 will increase.

For most locations, the new loan limit will be $766,550, an increase of $40,350 from 2023. The press release indicates that average home prices increased 5.56% between the third quarters of 2022 and 2023, and the conforming loan limit will increase by the same percentage.

In some areas with high housing values, the applicable loan limit will be doubled ($1,149,825). In addition, special statutory provisions require that the limit in Alaska, Hawaii, Guam, and the U.S. Virgin Islands must be set at 150% of the limit in other areas. That limit will be the same as in the high housing value areas ($1,149,825).

This is a map showing the 2024 conforming loan limits across the United States. And this is a list of FAQs the agency has answered.

A few news items affecting housing…

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Last week, the CDC extended the residential eviction moratorium to July 31. The constitutionality and validity of the moratorium has been litigated many times. The issues are: (1) the existence of constitutional power for the government to hand down such a moratorium under the Commerce Clause; and (2) whether the delegation of authority to the CDC by Congress is broad enough to encompass an eviction moratorium.

The latest decision was issued June 2 by the D.C. Circuit in Alabama Association of Realtors v. United States Department of Health and Human Services*. There, the Court upheld the stay of the lower court’s decision striking down the moratorium and made it clear that the panel believes the CDC would win on the merits. 

On Tuesday, the Supreme Court left the moratorium extension in place.

The Treasury Department issued new guidance encouraging states and local governments to streamline the distribution of the nearly $47 million in available emergency rental assistance funding.  Associate Attorney General Vanita Gupta released a letter to state courts encouraging them to pursue alternatives to protect tenants and landlords.

South Carolina Housing authority is working with landlords and tenants to administer the federal pandemic relief funding. The application must come from the tenant, but the landlord may refer the tenant to the agency for action.

In other news, President Biden fired Mark Calabria, the head of the Federal Housing Finance Agency (FHFA) last week, just hours after the Supreme Court held the structure of FHFA was unconstitutional under the separation of powers doctrine. The offending provision states the president can only remove the director for cause, not at will. FHFA regulates Fannie Mae and Freddie Mac, both of which have been the subject of extensive restructuring debate dating back to the housing crisis of 2008. The case is Collins v. Yellen**

Real estate practitioners will recall that the Court issued a similar decision last year concerning the structure of the Consumer Financial Protection Bureau (CFPB) in Seila Law v. CFPB***.

* 2021 WL 2221646 (D.C. Circuit, June 2, 2021).

** U.S. Supreme Court case 19-422, WL2557067, June 23, 2021.

*** 140 S. Ct. 2183 (2020).

Into the mystic: Fannie and Freddie predict what is in store for housing in 2017.

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In a sign that the average cost of houses is increasing across the country, the conforming loan limit for loans to be purchased by Fannie Mae and Freddie Mac will increase in 2017 for the first time in ten years.

The Federal Housing Finance Agency has announced the maximum conforming loan in most parts of the country (including South Carolina) will increase from $417,000 to $424,100. Stated another way, a borrower will not have to qualify for a “jumbo loan” unless the amount to be borrowed exceeds $424,100.

This change should help qualified buyers, particularly in our coastal areas where home prices are higher, obtain mortgages backed by Fannie Mae and Freddie Mac, even though credit remains tight and interest rates are likely to increase.

This is the time of the year when all of us involved in the housing industry are charged with looking into the proverbial crystal ball and projecting how we think the real estate market for the new year will compare with the current year.  For what it’s worth (and this and $5 will buy you a cup of coffee at Starbucks), I’m projecting around a 3 percent increase for next year in South Carolina. Let me know what your crystal ball is disclosing!

Federal Housing Finance Agency Announces Conforming Loan Limits for 2016

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The maximum remains the same in most markets

FHFA LogoSpeculation earlier this year was that the Federal Housing Finance Agency (FHFA) would increase the limits for conforming loans in 2016 above the current amount of $417,000. But FHFA recently announced that the current limit would remain in place for most of the country.

The limit is increased above $417,000 in only 39 counties in the United States. The so called “high cost” counties are located in the metro areas surrounding Denver, Boston, Nashville and Seattle as well as four counties in California.

By way of background, a conforming loan is a mortgage loan that meets the guidelines established by government-sponsored enterprises Fannie Mae and Freddie Mac. Conforming loans require uniform mortgage documentation and national standards dealing with loan-to-value ratios, debt-to-income ratios, credit scores and credit history. Conforming loans are repackaged to be sold on the secondary market. Because Fannie and Freddie do not purchase non-conforming loans, there is a much smaller secondary market for those loans.

The FHFA publishes conforming loan limits each year. Loans above the conforming limit are considered jumbo loans, which cannot be purchased by Fannie and Freddie and which typically have higher interest rates.

The Housing and Economic Recovery Act of 2008 established a baseline loan limit of $417,000 and required that after a period of housing price declines, the baseline loan limit cannot be increased until housing prices return to pre-decline levels.