The President issued Executive Order 14438 to decrease housing costs, according to a notice in the Federal Register. The order says the Administration will reduce regulatory barriers to mortgage origination, adopt new risk and value assessment tools, and promote competition in housing and mortgage markets. The order was published Wednesday in the Federal Register.
The action affects mortgage borrowers, homeowners seeking to refinance, and manufacturers of factory-built homes, the order says. It aims to cut costs tied to mortgage insurance, title insurance on refinances, and construction of manufactured and other factory-built homes. The order also addresses interest rates on direct home loans made by the Department of Agriculture and the Department of Veterans Affairs.
The order directs the Director of the Federal Housing Finance Agency to establish, if in the best interests of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation or the agency and the public, a pilot program for proactive cancellation of mortgage insurance on single-family loans the enterprises own, guarantee, or securitize. The pilot would use automated valuation models and other data to assess current market value and identify borrowers who appear to meet equity and other requirements for cancellation. The director is to set procedures including safety and soundness standards, payment-history requirements, and steps to notify borrowers and reduce unnecessary documentation, appraisal costs, and other administrative barriers.
The order also tells the director to expand a title acceptance pilot into an ongoing, nationwide program at both enterprises for eligible refinance transactions. The directive asks the regulator to consider extending eligibility above an 80 percent loan-to-value ratio where title risk remains low, removing geographic limits, certifying additional title-assessment providers, waiving appraisals and income re-verification for limited cash-out refinances that lower monthly payments where existing data support it, and reducing or eliminating enterprise fees on such refinances. The director must require that cost savings flow through to borrowers and that lenders inform borrowers of those savings.
To lower construction costs, the order creates a Task Force on Manufactured Housing Innovation co-chaired by the Secretary of Housing and Urban Development and the FHFA Director, with the Secretaries of Agriculture, Commerce, and Veterans Affairs as members. Within 180 days, the task force must send the President recommendations to increase the use of modern manufacturing methods for manufactured and other factory-built housing eligible for Federal housing programs. The order calls for actions to promote common specifications and approvals, reciprocal recognition of licenses and inspections to avoid duplication, removal of Federal requirements that impede automation and modular production, use of Federal financing and insurance authorities to spur innovation and production, and promotion of competition while maintaining safety, quality, durability, and consumer protections.
The task force must also evaluate whether existing statutory authorities allow Federal grants to be conditioned on, or used to encourage, State and local adoption of standardized permitting and licensing for manufactured and other factory-built housing. It is to prepare legislative recommendations to codify those policies. Agency heads represented on the task force are directed to take appropriate action within their authorities to implement the recommendations.
Separately, the order directs the Secretaries of Agriculture and Veterans Affairs to reduce interest rates on single-family home loans made directly by their departments, consistent with applicable law and available appropriations. The order states it creates no enforceable rights and will be implemented subject to law and funding.