Key insights
- An executive order by the Trump Administration aims to reduce closing costs for homebuyers and those refinancing mortgages. Key provisions include a pilot program to automatically cancel mortgage insurance for loans held by Fannie Mae and Freddie Mac that meet cancellation criteria, potentially saving borrowers hundreds per month. The order also targets lenders' title insurance for low-risk refinancing and establishes a task force to streamline manufactured home construction.
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If you’re planning to buy a house with less than a 20% down payment, or to refinance your existing mortgage, an executive order by the Trump Administration might save you some money.
An order signed last week by President Donald Trump targets several closing cost fees paid by buyers in home loan transactions.1 The order includes several different regulations, one affecting mortgage insurance and another targeting lenders’ title insurance for low-risk refinancing loans. A third part of the order establishes a task force to streamline the construction of manufactured homes and lower costs.The first two parts of the order could save borrowers thousands in closing costs in certain situations.
The mortgage insurance portion of the order affects homebuyers who pay less than a 20% down payment and are required to buy mortgage insurance for their home loans.
The order establishes a pilot program under which the Federal Housing Finance Agency would identify and automatically cancel mortgage insurance for loans that meet cancellation criteria. That criterion usually means loans that have been paid down to an 80% loan-to-value ratio.
The program applies only to new home loans held by Fannie Mae and Freddie Mac, the government-sponsored enterprises that backstop most mortgages in the country.
Homeowners whose insurance policies are canceled under the program could save hundreds a month.
The insurance, which protects lenders against loans going into default, typically costs 0.46% to 1.5% of the loan’s value, depending on the borrower’s credit rating, according to the Urban Institute think tank.1 That can translate to hundreds of dollars per month. For example, a $300,000 home loan at 1% PMI would cost $250 per month.2
The new program may overlap with a 1998 law that gives homeowners the right to request the cancellation of their mortgage insurance once they reach an 80% loan-to-value ratio, and automatically cancels it when the ratio reaches 78%.3
Another part of the order expands a pilot program begun in 2024 that allows buyers to skip the lender’s title insurance on certain low-risk refinancing loans. Lender’s title insurance protects the lender in case legal trouble arises from liens or other claims against a property that arose after the original purchase.
In 2024, the FHFA estimated homeowners that skipped paying for the lender’s title insurance would save $500 to $1,500 in closing costs.4
The Trump administration’s order echoes a Joe Biden-era effort to rein in closing costs on home loans. Back in 2024, the Consumer Financial Protection Bureau launched a study of mortgage closing costs, which by 2022 had surged to a median of $6,000.
The bureau dubbed many such costs “junk fees” and noted homebuyers have little control over them or the opportunity to shop around to reduce them.5
The bureau hasn’t released any further information about the study and hasn’t issued any press releases since January 2025. The Trump administration effectively gutted the CFPB, scaling back its activities and firing most of its staff. The bureau did not respond to an email requesting comment.