Trump Signs Order to Cut Mortgage Insurance Costs for Homebuyers

President Trump signed an executive order on Thursday aimed at making homes more affordable, with private mortgage insurance at the center of it. The order tells the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, to set up a pilot program that automatically ends a borrower’s premiums once they have enough equity. Shares of both mortgage giants slid on Friday, with Fannie Mae down 5.23% and Freddie Mac down 6.08%.

How Mortgage Insurance Cancellation Works Today

Buyers who put down less than 20% usually need PMI to qualify for a conventional loan. Right now, a borrower can ask the lender to drop it at 20% equity, and lenders must remove it automatically at 22%. The pilot would simplify that process. Freddie Mac estimates premiums at $30 to $70 a month for every $100,000 borrowed, though brokers say many are lower, and an industry group reports a 25% drop since 2017. Use is climbing, with 36% of conventional borrowers paying PMI in 2024, up from 25.4% in 2016, according to Urban Institute data.

Other Housing Affordability Measures in the Order

The order also creates a task force on manufactured housing construction innovation and expands a pilot that waives title insurance on certain refinancings. It further directs officials to lower rates on the small number of home loans issued directly by the Department of Veterans Affairs and the Department of Agriculture.