Trump Signs Order Aimed at Cutting Mortgage Insurance and Refinance Costs as Rates Top 7%

President Donald Trump signed an executive order Thursday aimed at trimming the costs of buying and refinancing a home, as 30-year mortgage rates hover above 7% less than two weeks before the midterm elections.

The order, titled “Decreasing Housing Costs for the American People,” directs federal housing agencies to lower mortgage insurance and refinancing costs and to expand factory-built housing, according to a White House fact sheet.

“Homeownership is a vital pillar of our great Nation, and President Trump and his Administration are working tirelessly to cut burdensome costs and red tape,” the White House said in a statement.

What the Order Does

The Federal Housing Finance Agency is directed to launch a pilot canceling borrowers’ mortgage insurance once they meet equity requirements based on current market values, Reuters reported. It would cover only new mortgages.

Under the plan, automated valuation models would be used to estimate current home values, which could let some owners whose homes have appreciated stop paying mortgage insurance sooner.

The order also makes permanent an FHFA pilot that waives title insurance requirements for refinances. Title insurance is one of the closing costs borrowers pay when they refinance a home loan.

The secretaries of Agriculture and Veterans Affairs are directed to reduce interest rates on the single-family home loans their departments issue directly to borrowers, a step aimed at rural buyers and veterans.

A new Task Force on Manufactured Housing Innovation, co-chaired by the Department of Housing and Urban Development and the FHFA, is to recommend within 180 days how to expand factory-built homes eligible for federal programs.

The order follows a draft previously reported by Politico, which noted that housing costs have loomed over a midterm cycle centered on voters’ economic frustrations.

The numbers show why. The average 30-year fixed mortgage rate reached 7.40% last week, the highest in about three years, before dipping to 7.32% this week, according to Freddie Mac.

Contracts to buy previously owned homes fell to a record low in September, according to the National Association of Realtors. Single-family housing starts dropped 4.6%, and permits hit a three-and-a-half-year low.

There was one bright spot for borrowers. The yield on the 10-year Treasury note, a benchmark for mortgage pricing, has fallen more than a quarter of a percentage point over the past two weeks.

The White House framed the measures as part of a broader push to cut costs and red tape for buyers. How much borrowers actually save will depend on how the federal agencies carry out the new directives.

For now, the measures mostly address closing costs and insurance rather than the price of homes or the level of mortgage rates, which remain tied to broader market forces and Federal Reserve policy.

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