Trump executive order targets mortgage insurance and refinancing costs

President Donald Trump signed an executive order aimed at reducing mortgage costs as rising interest rates and inflation make homeownership less affordable.

The order, titled “Lowering Housing Costs for the American People,” directs federal agencies to proactively cancel mortgage insurance on future eligible loans and expand a program to make refinancing cheaper, among other actions.

In an article published 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 impact on consumers 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 housing costs and affordability a top concern among voters. It builds on previous orders aimed at blocking Wall Street firms from purchasing 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 about 33% of median family income, up from 26% in 2022, according to the Federal Reserve’s latest survey of consumer finances released in early October.

Whether you are a current owner or a future buyer, here are some of the key things to know about the new decree.

Conventional loans – mortgages that are uninsured or guaranteed by U.S. government programs – generally require private mortgage insurance, or PMI, when a down payment is less than 20 percent of the home’s purchase price. In contrast, Federal Housing Administration mortgages require mortgage insurance on all loans.

Trump’s executive order directs the FHFA to create a pilot program that “proactively” cancels mortgage insurance for eligible borrowers once their home equity reaches a certain threshold, according to the White House. This would apply to mortgages issued after the launch of the pilot program.

Currently, conventional loan borrowers can generally eliminate PMI once their loan balance is below 80% of the purchase price or once they reach 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 have PMI removed, or they may remove it automatically when your balance reaches 78% of the original value.

In a statement Thursday, Seth Appleton, president of Mortgage Underwriters of America, an industry trade organization, said, “We welcome the president’s focus on reducing costs for future homeowners, and the private mortgage insurance industry is proud to have already achieved that goal.”

Typically, the cost of PMI can be 0.2% to 2% of the loan per year, but varies depending on your down payment amount, your credit score, the amount borrowed and other factors, according to Fannie Mae.

For example, if you bought 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 … carry a PMI right now, especially with house prices moving and down payments as low as they have been in recent years,” Gumbinger said.

During the second quarter of 2026, the median down payment was 13.7% of the home’s purchase price, or $27,100, according to a September report from Realtor.com.

Trump’s executive order also aims to reduce mortgage refinancing costs by making permanent the FHFA pilot program that eliminates the lender’s title insurance policy and allows for “more cost-effective alternatives,” according to the White House.

“I don’t know if it’s necessarily going to be a game-changer in terms of the cost of housing, which is currently driven by home prices and mortgage rates,” Gumbinger said. “But you know, every little bit definitely helps.”

As of Oct. 23, mortgage interest rates for 30-year fixed-rate mortgages were 7.32 percent, according to Freddie Mac, and refinancing demand was down 59 percent in mid-October, compared to the same week the previous year.

Originally scheduled to run until November 2027, the FHFA pilot was “limited in scope,” for refinances with a loan-to-value ratio below 80 percent, in a handful of states, former FHFA Director Sandra Thompson said during an April 2024 congressional hearing.

Thompson estimated that consumers could save $500 to $1,500 in closing costs for loans sold through the pilot program.

Making the program permanent could save borrowers because the lender’s title insurance policy, which is typically required for new loans and refinancings, “has always been quite expensive,” Gumbinger said.

Lender fees related to title and title insurance typically make up the largest portion of a mortgage’s closing costs, according to a 2025 Urban Institute report.