President Donald Trump has issued an executive order designed to address rising housing costs and affordability concerns among American homeowners and prospective buyers. The directive, formally titled “Decreasing Housing Costs for the American People,” instructs federal agencies to take several actions including proactively canceling mortgage insurance on qualifying future loans and expanding programs that reduce refinancing expenses.
The order targets private mortgage insurance, or PMI, which borrowers typically must pay when their down payment falls below 20% of a home’s purchase price. Under the executive order, the Federal Housing Finance Agency will establish a pilot program that automatically removes mortgage insurance from eligible borrowers once their home equity reaches specified levels. This would apply to mortgages originated after the pilot program begins. Currently, conventional loan borrowers can request PMI removal once their loan balance drops to 80% of the purchase price or they achieve 20% equity, though automatic removal occurs at 78% of the original loan value. Annual PMI costs typically range from 0.2% to 2% of the loan amount, though exact figures vary based on factors including down payment size, credit score, and loan amount.
The order also aims to reduce refinancing costs by making permanent the FHFA’s existing pilot program that waives lender title insurance requirements and permits alternative approaches. Title insurance and related fees represent the largest component of mortgage closing costs, and the previous pilot program was estimated to save consumers between $500 and $1,500 per transaction. The pilot, originally scheduled through November 2027, had been limited in scope to refinances with loan-to-value ratios below 80% in select states.
Housing affordability has declined significantly in recent years. Data from the Federal Reserve’s Survey of Consumer Finances, published in early October, indicates that monthly mortgage payments on median-priced homes consumed approximately 33% of median family income in 2025, compared to 26% in 2022. Industry representatives expressed support for the initiative, though analysts cautioned that the full consumer impact remains unclear pending additional implementation details.
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