Trump orders Fannie and Freddie to test automatic cancellation of mortgage insurance and cheaper refinancing

By Julian Westerly

WASHINGTON — President Donald Trump on Wednesday signed an executive order directing the Federal Housing Finance Agency to have Fannie Mae and Freddie Mac test a program that would cancel borrowers’ mortgage insurance automatically once rising home values give them enough equity, and to turn a pilot that lets some refinancing borrowers skip lender’s title insurance into a permanent, nationwide program.

The order, titled “Decreasing Housing Costs for the American People,” also creates a federal task force on factory-built housing and tells the Agriculture and Veterans Affairs departments to cut the interest rates they charge on home loans they make directly. A White House fact sheet said the insurance change “will eliminate a large monthly expense for qualifying Americans across the country.”

The text of the order is narrower than that summary in several places. Most of its directives take effect only if the FHFA director, Bill Pulte, “determines that it is in the best interests” of Fannie Mae, Freddie Mac or the agency “and the American public,” and the mortgage-insurance pilot applies “only to mortgages made after the establishment of the pilot program.” Homeowners who already pay private mortgage insurance would not be covered by the pilot as written.

Mortgage insurance

Borrowers who put down less than 20 percent on a conventional loan usually pay private mortgage insurance. Under the federal Homeowners Protection Act, a borrower can ask to cancel it when the loan balance is scheduled to reach 80 percent of the home’s original value, and the servicer must end it automatically at 78 percent, according to the Consumer Financial Protection Bureau. The bureau notes that Fannie Mae and Freddie Mac can set their own cancellation guidelines as long as they are no less favorable to borrowers.

The order would measure equity against a home’s current market value instead. It tells the two companies to periodically review the loans they own or guarantee “using automated valuation models and other available data,” to identify borrowers who appear to qualify, and to cancel the insurance “proactively” when the borrower meets equity and payment-history standards and cancellation is consistent with safety and soundness and the companies’ contracts. Servicers would be told to notify eligible borrowers and to cut “unnecessary documentation requests, appraisal costs, and other administrative barriers.”

The order does not say how much borrowers would save, what equity threshold would apply or when the pilot would start.

Title insurance on refinances

Section 4 directs the FHFA director, again subject to his determination, to expand the companies’ “title acceptance pilot into an ongoing program, available nationwide,” under which Fannie or Freddie may accept an automated title review approved by the agency in place of a lender’s title insurance policy on eligible refinances. The director is told to consider opening it to loans above the current 80 percent loan-to-value limit, removing geographic limits, certifying more title-assessment providers, waiving appraisals and income re-verification for some refinances that lower a borrower’s payment, and reducing loan-level price adjustments and other fees. Any savings must be passed through to borrowers, and lenders must tell borrowers about them.

Factory-built homes and direct loans

The new Task Force on Manufactured Housing Innovation will be co-chaired by the secretary of Housing and Urban Development and the FHFA director, with the secretaries of Agriculture, Commerce and Veterans Affairs. Within 180 days it must send the president recommendations on common federal specifications, inspections and approvals for manufactured and other factory-built homes, and on eliminating federal requirements that slow “automation, modularization, standardized production.”

The task force must also evaluate whether federal grant money can be conditioned on, or used to encourage, state and local adoption of standardized permitting for such homes, building on Executive Order 14394, which Trump signed March 13, and draft legislation to write that policy into law.

Section 5 tells the Agriculture and Veterans Affairs secretaries to reduce interest rates on single-family loans their departments make directly, “consistent with applicable law” and “available appropriations.” It cites the statutes that govern USDA’s rural direct loans (42 U.S.C. 1490a) and VA direct loans (38 U.S.C. 3762). It does not set a new rate.

The order’s purpose section says the administration will “embrace innovative risk and value assessment technologies that incorporate Super Intelligence” to lower mortgage costs. The order does not define the term. It also says the FHFA, not the White House, will pay the cost of publishing it in the Federal Register.

The fact sheet lists earlier housing actions, including a January order barring large institutional investors from buying single-family homes and a January directive for Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities.

U.S. Mortgage Insurers pointed after publication to a statement by its president, Seth Appleton. “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,” Appleton said in the statement. “Private MI is designed to be temporary, and the system already works much the way the order envisions, because when MI is cancelled, a borrower’s monthly payment goes down.”

The Inquisitor sent requests for comment early Friday to the White House press office, the Federal Housing Finance Agency, the Department of Veterans Affairs, U.S. Mortgage Insurers and the Manufactured Housing Institute. None had responded by publication. U.S. Mortgage Insurers has since pointed to its statement, quoted above.

Update, Oct. 23, 2026: This story has been updated with a statement from U.S. Mortgage Insurers.

Photo: The Federal Housing Finance Agency’s sign outside Constitution Center in Washington. G. Edward Johnson / Wikimedia Commons, CC BY 4.0.