President Donald Trump signed an executive order on Thursday directing federal agencies to reduce mortgage costs for American homeowners and prospective buyers. The order, titled "Decreasing Housing Costs for the American People," takes aim at two major expenses: private mortgage insurance on conventional loans and closing costs for refinancing transactions.
The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac—the government-controlled companies backing more than half of U.S. residential mortgages—will establish a pilot program to proactively cancel mortgage insurance once borrowers accumulate a specified level of home equity. The directive applies only to mortgages originated after the pilot program launches, meaning existing borrowers would not automatically benefit. Currently, conventional loan borrowers typically pay private mortgage insurance when their down payment is less than 20 percent of the home's purchase price. Under existing rules, borrowers can request cancellation once their loan balance reaches 80 percent of the original purchase price, with automatic termination generally occurring at 78 percent. Annual private mortgage insurance costs typically range from 0.2 percent to 2 percent of the loan amount, depending on down payment size, credit score, and other factors. For example, Freddie Mac's mortgage calculator estimates that purchasing a $600,000 home with a 10 percent down payment and a 7.3 percent mortgage rate would generate monthly insurance costs of $351, or approximately $4,212 annually.
The executive order also seeks to make permanent an existing FHFA pilot program that allows eligible refinancing transactions to proceed without traditional lender's title insurance, replacing it with less expensive alternatives like automated title reviews. The program, originally scheduled to run until November 2027, was limited to certain states and refinancing transactions. Former FHFA director Sandra Thompson estimated during a congressional hearing in April 2024 that qualifying borrowers could save between $500 and $1,500 in closing costs through this measure.
Federal Housing Finance Agency director Bill Pulte stated on social media Thursday that "millions of Americans will save thousands and thousands of dollars." However, Keith Gumbinger, vice president of mortgage website HSH, cautioned that the financial impact remains difficult to determine without further implementation details. Gumbinger also noted that while cost reductions help, they may not fundamentally address housing affordability, which is primarily dictated by home prices and mortgage interest rates. As of October 23, the 30-year fixed-rate mortgage rate stood at 7.32 percent, according to Freddie Mac.
The timing of the executive order reflects broader political concerns. The announcement comes less than two weeks before the November 3 midterm elections, with housing affordability weighing heavily on American voters. According to the Federal Reserve's Survey of Consumer Finances published in early October, monthly mortgage payments on a median-priced home accounted for approximately 33 percent of median family income in 2025, compared with 26 percent in 2022. During the second quarter of 2026, the median home down payment was 13.7 percent of the home's purchase price, or $27,100, indicating that most mortgages currently require private mortgage insurance.
The executive order also establishes a task force focused on reducing manufactured housing costs, co-chaired by the Secretary of Housing and Urban Development and the FHFA director. Additionally, it directs the Departments of Agriculture and Veterans Affairs, which have direct loan programs, to lower interest rates on single-family mortgages they make. The Trump administration stated that the order aims to "reduce regulatory barriers to mortgage origination and costs impeding homeownership."
FHFA director Bill Pulte signaled additional changes may be forthcoming, including potential studies of using fewer credit reports to reduce consumer costs and possible adjustments to loan-level pricing calculations, with decisions anticipated before year's end. Refinancing activity remains subdued, however, with demand down 59 percent in mid-October compared with the same period the prior year.
