Trump's housing order cancels no one's mortgage insurance today: it covers only future loans

President Trump signed an executive order this week, dated Oct. 22, called "Decreasing Housing Costs for the American People". CNBC reported it as a move to cut mortgage insurance and refinancing costs. The headline version is bigger than the legal text. Read line by line, the order tells the Federal Housing Finance Agency (FHFA) to consider two pilot-style programs. It does not cancel any existing borrower's insurance and it does not lower mortgage rates.

What the order actually says

• Mortgage insurance (Section 2). The FHFA director "shall, if he determines that it is in the best interests" of Fannie Mae, Freddie Mac and the public, direct them to start a pilot that uses automated valuation models to spot borrowers who have enough equity and cancels private mortgage insurance (PMI) without being asked. It applies "only to mortgages made after the establishment of the pilot program". No start date is given.
• Title insurance (Section 4). Again "if he determines", the FHFA would turn an existing pilot into a nationwide, permanent program in which Fannie and Freddie accept an automated title review instead of a lender's title policy on eligible refinances. It asks the director to consider going above today's 80% loan-to-value limit, and it says savings must be passed through to borrowers.
• Manufactured housing (Section 3). A task force of HUD, the FHFA and other agencies has 180 days to recommend how to speed factory-built homes. Nothing changes before then.
• Direct loans (Section 5). Agriculture and Veterans Affairs are told to lower rates on loans they make directly, "consistent with applicable law" and "subject to the availability of appropriations".

The order also says it creates no enforceable rights. It is an instruction to agencies, and the two biggest items depend on a director's judgment.

The thing the headlines blur: who is left out

Anyone who already has a mortgage is outside the PMI pilot. The text limits it to loans originated after the pilot exists. Today, as CNBC notes citing Fannie Mae, a conventional borrower can ask to drop PMI once the balance reaches 80% of the original value, and servicers must generally remove it automatically at 78%. The pilot would change who has to ask, using a computer-estimated current home value, for loans that have not been written yet.

The money at stake is real for a buyer who puts down less than 20%. CNBC cites a Freddie Mac calculator putting PMI at $351 a month on a $600,000 home with 10% down at 7.3%. On the $540,000 loan that implies, $351 a month is $4,212 a year, or about 0.78% of the loan. The typical range CNBC gives, 0.2% to 2% a year, works out to roughly $90 to $900 a month on the same loan. Realtor.com data cited by CNBC puts the median second-quarter down payment at 13.7%, so most buyers are in PMI territory.

For scale, principal and interest on a $540,000 30-year loan at Freddie Mac's current 7.32% average is about $3,709 a month (our calculation). A $351 PMI charge is roughly 9% on top of that. Removing it a year or two early would matter. Removing it at all would not change the rate.

Refinancing: a closing-cost cut in a market with few refinancers

The title-insurance piece targets one of the larger line items at closing. CNBC cites an Urban Institute report that title fees are generally the biggest share of closing costs. It also quotes former FHFA director Sandra Thompson, who estimated in April 2024 that the existing, limited pilot saved consumers $500 to $1,500 on a refinance. Applied to a $540,000 loan, $1,000 saved would equal about three months of that $351 PMI payment, paid once.

The weak point is demand. Freddie Mac's survey had the 30-year rate at 7.32% on Oct. 22 (7.40% in each of the two weeks before), and CNBC cites refinance demand down 59% from a year earlier. Cheaper closing does not make a 7.3% loan worth refinancing for someone sitting on a lower rate. The groups who could gain are borrowers who bought at the highest rates of the past year and a half and would refinance if rates drop, and anyone whose loan-to-value would qualify only if the FHFA lifts the 80% cap.

Who feels it, and when

• A first-time buyer closing in November with 10% down: likely no change. The pilot does not exist yet and covers later loans.
• A homeowner paying PMI today: no change from this order. The existing 80% request and 78% automatic rules still apply.
• A buyer who closes after a pilot launches: may get PMI dropped without paperwork, if the FHFA director approves it and the home's estimated value holds up.
• A lender or title agent: a nationwide waiver of lender's title policies would cut a revenue line. The order instructs that savings be passed to borrowers.
• A manufactured-housing builder or dealer: a 180-day wait for recommendations, then agency action. Nothing near term.

HousingWire's coverage, per its headline, described the order as scaled back and the industry reaction as mixed. CNBC quoted HSH vice president Keith Gumbinger saying it is hard to know the consumer impact without more detail and that it is not necessarily "a game-changer" because home prices and rates dominate the cost. The mortgage insurers' trade group said the industry is already working to lower costs for future owners.

What to watch

Three things decide whether this matters: whether the FHFA director actually directs Fannie and Freddie to launch the pilots, the launch dates, and whether the title program lifts the 80% loan-to-value limit. Until the FHFA publishes guidance, a buyer should price a deal on the rate and the PMI quote in hand, and a homeowner should check whether they can already request PMI removal. The order lands less than two weeks before the Nov. 3 midterm elections.

See our latest on the weekly mortgage rate, the 10-year Treasury chart and all real estate coverage.

Sources: White House executive order text; CNBC; Freddie Mac PMMS; HousingWire (headline only). Payment figures are our own calculations from the rates and loan sizes shown. This is market information, not investment advice.