Trump's executive order targets mortgage insurance, refinance costs. What it means for borrowers

source: news (news:cnbc-markets)published 2026-10-23 19:53ingested 2026-10-23 20:28

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President Donald Trump has signed an executive order that aims to reduce mortgage costs as rising interest rates and inflation make homeownership less affordable. The order, titled "Decreasing Housing Costs for the American People," directs federal agencies to proactively cancel mortgage insurance on eligible future loans and expand a program to make refinancing cheaper, among other actions. In an X post on Thursday, Federal Housing Finance Agency director Bill Pulte said "millions of Americans will save thousands and thousands of dollars." But it's difficult to know the future consumer impact without more details, according to Keith Gumbinger, vice president of mortgage website HSH. Trump's executive order comes less than two weeks before the Nov. 3 midterm elections, with rising costs and housing affordability a major concern among voters. It builds on previous orders to restrict Wall Street firms from buying single-family homes, among other actions. Homeownership has become less affordable in recent years. In 2025, the monthly payment for a 30-year fixed-rate mortgage on a median-priced home was roughly 33% of the median family's income, up from 26% in 2022, according to the Federal Reserve's latest Survey of Consumer Finances published in early October. Whether you're a current homeowner or future buyer, here are some of the key things to know about the new executive order. Mortgage insurance changes Conventional loans — mortgages not insured or backed by U.S. government programs — typically require private mortgage insurance, or PMI, when a down payment is less than 20% of the home's purchase price. By contrast, Federal Housing Administration mortgages require mortgage insurance on all loans. Trump's executive order directs the FHFA to create a pilot program that cancels eligible borrowers' mortgage insurance "proactively" once their home equity reaches a certain threshold, according to the White House. This would apply to mortgages originated after the pilot program launches. Currently, conventional loan borrowers can generally remove PMI once their loan balance is below 80% of the purchase price or once they have reached 20% equity, according to Fannie Mae. Once your balance is below 80%, you can ask your loan servicer if you're eligible to remove PMI, or they may remove it automatically when your balance reaches 78% of the original value. In a statement Thursday, Seth Appleton, president of U.S. mortgage insurers, an industry trade organization, said: "We commend the President's focus on lowering costs for future homeowners, and the private mortgage insurance industry is proud to already be delivering on that goal." Typically, the cost of PMI can be 0.2% to 2% of the loan annually, but varies based on your down payment size, credit score, amount borrowed and other factors, according to Fannie Mae. For example, if you purchased a $600,000 home with a 10% down payment and a 30-year fixed-rate mortgage at 7.3%, your monthly mortgage insurance could be $351, according to a private mortgage calculator from Freddie Mac. "Most mortgages ... are carrying PMI at this point in time, especially with the way home prices have been and down payments being as small as they've been in recent years," Gumbinger said. During the second quarter of 2026, the median home down payment was 13.7% of the home's purchase price, or $27,100, according to a September report from Realtor.com. Mortgage refinancing costs Trump's executive order also aims to reduce mortgage refinancing costs by making permanent the FHFA's pilot program that waives the lender's title insurance policy and allows "cost-friendly alternatives," according to the White House. "I don't know that it's necessarily a game-changer in terms of the cost of housing, which is dictated by home price and mortgage rates at the moment," Gumbinger said. "But you know, every little bit certainly helps." As of Oct. 23, mortgage interest rates for 30-year fixed-rate mortgages were 7.32%, according to Freddie Mac, and refinance demand was down 59% in mid-October, compared to the same week the previous year. Originally planned through November 2027, the FHFA pilot was "limited in scope," for refinances with a loan-to-value ratio below 80%, in a handful of states, former FHFA director Sandra Thompson said during a Congressional hearing in April 2024. Thompson estimated that consumers could save $500 to $1,500 in closing costs for loans sold under the pilot program. Making the program permanent could save borrowers because the lender's title insurance policy, which is usually required for new loans and refinances, "has always been fairly pricey," Gumbinger said. The lender's title and title insurance-related fees generally make up the largest share of mortgage closing costs, according to a 2025 Urban Institute report.

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President Donald Trump has signed an executive order that aims to reduce mortgage costs as rising interest rates and inflation make homeownership less affordable.
The order, titled "Decreasing Housing Costs for the American People," directs federal agencies to proactively cancel mortgage insurance on eligible future loans and expand a program to make refinancing cheaper, among other actions.
In an X post on Thursday, Federal Housing Finance Agency director Bill Pulte said "millions of Americans will save thousands and thousands of dollars."
But it's difficult to know the future consumer impact without more details, according to Keith Gumbinger, vice president of mortgage website HSH.
Trump's executive order comes less than two weeks before the Nov. 3 midterm elections, with rising costs and housing affordability a major concern among voters. It builds on previous orders to restrict Wall Street firms from buying single-family homes, among other actions.
Homeownership has become less affordable in recent years. In 2025, the monthly payment for a 30-year fixed-rate mortgage on a median-priced home was roughly 33% of the median family's income, up from 26% in 2022, according to the Federal Reserve's latest Survey of Consumer Finances published in early October.
Whether you're a current homeowner or future buyer, here are some of the key things to know about the new executive order.
Mortgage insurance changes
Conventional loans — mortgages not insured or backed by U.S. government programs — typically require private mortgage insurance, or PMI, when a down payment is less than 20% of the home's purchase price. By contrast, Federal Housing Administration mortgages require mortgage insurance on all loans.
Trump's executive order directs the FHFA to create a pilot program that cancels eligible borrowers' mortgage insurance "proactively" once their home equity reaches a certain threshold, according to the White House. This would apply to mortgages originated after the pilot program launches.
Currently, conventional loan borrowers can generally remove PMI once their loan balance is below 80% of the purchase price or once they have reached 20% equity, according to Fannie Mae. Once your balance reaches 80% of the original value, you can ask your loan servicer if you're eligible to remove PMI, or they may remove it automatically when your balance reaches 78% of the original value.
In a statement Thursday, Seth Appleton, president of U.S. mortgage insurers, an industry trade organization, said: "We commend the President's focus on lowering costs for future homeowners, and the private mortgage insurance industry is proud to already be delivering on that goal."
Typically, the cost of PMI can be 0.2% to 2% of the loan annually, but varies based on your down payment size, credit score, amount borrowed and other factors, according to Fannie Mae.
For example, if you purchased a $600,000 home with a 10% down payment and a 30-year fixed-rate mortgage at 7.3%, your monthly mortgage insurance could be $351, according to a private mortgage calculator from Freddie Mac.
"Most mortgages ... are carrying PMI at this point in time, especially with the way home prices have been and down payments being as small as they've been in recent years," Gumbinger said.
During the second quarter of 2026, the median home down payment was 13.7% of the home's purchase price, or $27,100, according to a September report from Realtor.com.
Mortgage refinancing costs
Trump's executive order also aims to reduce mortgage refinancing costs by making permanent the FHFA's pilot program that waives the lender's title insurance policy and allows "cost-friendly alternatives," according to the White House.
"I don't know that it's necessarily a game-changer in terms of the cost of housing, which is dictated by home price and mortgage rates at the moment," Gumbinger said. "But you know, every little bit certainly helps."
As of Oct. 23, mortgage interest rates for 30-year fixed-rate mortgages were 7.32%, according to Freddie Mac, and refinance demand was down 59% in mid-October, compared with the same week the previous year.
Originally planned through November 2027, the FHFA pilot was "limited in scope," for refinances with a loan-to-value ratio below 80%, in a handful of states, former FHFA director Sandra Thompson said during a congressional hearing in April 2024.
Thompson estimated that consumers could save $500 to $1,500 in closing costs for loans sold under the pilot program.
Making the program permanent could save borrowers because the lender's title insurance policy, which is usually required for new loans and refinances, "has always been fairly pricey," Gumbinger said.
The lender's fees related to title and title insurance generally make up the largest share of mortgage closing costs, according to a 2025 Urban Institute report.