The Trump administration is gearing up to unveil an executive order addressing housing affordability, particularly for first-time homebuyers, as it looks to tackle voter concerns. Central to the discussions are potential initiatives such as introducing a 50-year mortgage option and preventing institutional investors from acquiring single-family homes. Additionally, newer suggestions include allowing homebuyers to withdraw funds from their 529 or 401(k) accounts for down payments without facing tax penalties.
While the specifics of the timing and content remain in flux, officials expect President Trump to provide more details during his address at the World Economic Forum in Davos, Switzerland, later this month. Bill Pulte, the head of the Federal Housing Finance Agency and a close advisor to Trump, confirmed that an executive action is imminent, which he anticipates will ultimately need congressional endorsement.
Discussions around the executive order have been ongoing for several months, stalling at times due to differing opinions within the administration regarding the role of federal authority over state and local decisions. White House spokesperson Davis Ingle emphasized that any speculation about the executive order until Trump’s announcement is unfounded.
The administration’s housing agenda has previously focused on blaming undocumented immigrants for housing shortages and unwinding fair housing regulations. Plans to take Fannie Mae and Freddie Mac public, a highly complex initiative, have also been part of the conversation.
Recent momentum has arisen following a meeting of top housing officials, with Trump announcing his intention to ban institutional investors in a statement on social media. He suggested that Fannie Mae and Freddie Mac utilize approximately $200 billion in cash for purchasing mortgage bonds, which he claims will lead to lower mortgage rates and monthly payments.
Moreover, officials are considering the implementation of “portable mortgages,” allowing homeowners to keep their existing mortgages when moving, along with “assumable mortgages,” where buyers can take over sellers’ loans. These proposals aim to mitigate the impact of rising mortgage rates and encourage homeowners with lower fixed rates to sell their properties, thus increasing housing availability.
The administration is also exploring ways to expand economic opportunities in distressed areas through Opportunity Zones and other deregulation strategies to promote homeownership. Insights gathered from polling highlight that voters aged 18 to 24 are particularly concerned about housing affordability, a priority for the administration given the demographic’s significant contribution to Trump’s electoral success.
David Dworkin, president and chief executive of the National Housing Conference, expressed that easing withdrawal restrictions from 401(k)s will be impactful for younger buyers. He asserted that enhancing housing supply through increased construction is essential for making homes more affordable.
While some democratic leaders have criticized the proposed policies, acknowledging their previous attempts at similar measures, housing remains a rare area of bipartisan agreement. A bill aimed at increasing housing supply and reducing construction regulations is making progress, fueled by the shared recognition that expanding housing options is vital for achieving the American Dream.
The anticipated changes signal a proactive approach to addressing housing affordability challenges, which could resonate positively with many voters looking for tangible solutions.