President Trump Issues Executive Orders on Removal of Regulatory Barriers to Affordable Housing, Promoting Access to Mortgage Credit

This afternoon, President Trump signed two executive orders (EOs) focused on removing regulatory barriers to affordable housing construction and promoting access to mortgage credit. An email to stakeholders announcing the EOs also stated, “President Trump will continue to advance his housing affordability agenda with the 21^st Century ROAD to Housing Act before Congress,” underscoring his support for the legislation the Senate passed this week that includes several NCSHA priorities, including reforms to the HOME program; raising the public welfare investment cap, which could bring more bank investment to the Housing Credit program; and decoupling of rural rental assistance from Rural Housing Service mortgage programs.

Removing Regulatory Barriers to Affordable Home Construction

The EO directs several federal agencies to reduce regulatory barriers to building homes, such as barriers related to environmental reviews and energy and water use requirements, development density, chattel lending for manufactured housing, residential building codes, and other rules that constrain residential development and impede housing affordability. Specifically, the EO directs:

• The secretary of the Army and the Environmental Protection Agency (EPA) administrator to review and revise requirements related to stormwater, wetlands, lakes, rivers, and other bodies of water to reduce housing construction and ownership costs, streamline regulatory and agency decision-making processes, reduce property tax burdens, and increase insurability.
• The secretaries of Housing and Urban Development (HUD), Commerce, and Transportation and the director of the Federal Housing Finance Agency (FHFA) to each consider eliminating unduly burdensome rules and make program reforms to promote residential development and affordability, particularly for single-family homes. In particular, the HUD Secretary is tasked with reviewing the department’s Pathways to Removing Obstacles to Housing Program, and FHFA is tasked with reviewing its guidelines and regulations regarding chattel lending for manufactured housing and incentivizing low-balance home mortgages.
• The secretaries of HUD, Agriculture (USDA), and Energy and the FHFA director to each reform or, where appropriate, eliminate burdensome or costly energy efficiency, water use, or alternative energy requirements.
• The chairman of the Council on Environmental Quality to provide guidance to executive departments and agencies on adjusting implementation of the National Environmental Policy Act (NEPA), including by establishing categorical exclusions to NEPA to reduce burdens on housing construction, preservation, adaptive re-use, and infrastructure that facilitate housing construction.
• The chairman of the Advisory Council on Historic Preservation to develop guidance on reducing reporting burdens associated with projects under Section 106 of the National Historic Preservation Act.
• The secretary of HUD to coordinate with the assistant secretary for domestic policy on the development and promulgation of regulatory best practices for state and local governments to promote housing construction and affordability, including best practices for streamlining housing permitting processes, limiting retroactive application of new or changed building codes, curtailing mandates that increase construction costs, removing restrictions on manufactured or modular housing, and eliminating arbitrary limitations on development outside of urban centers.
• The secretaries of the Treasury and HUD to jointly evaluate administration actions to align programs and incentives with the Opportunity Zone (OZ) tax incentive to expand single-family home construction in OZs and assess opportunities to coordinate the OZ incentive with the New Market Tax Credit to promote single-family home construction.

Last year, NCSHA sent the administration a detailed list of recommendations for removing regulatory barriers to affordable housing. We will continue to advocate for these changes, particularly those that fit in with the administration’s priorities outlined in this EO.

Expanding Access to Mortgage Credit

The EO seeks to make it easier for Americans to purchase homes by directing federal agencies to make a series of regulatory changes the administration argues will reduce unnecessary costs and increase lender participation in mortgage lending and servicing. The executive order says recent statutory and regulatory changes, including those adopted under the Dodd-Frank Wall Street Reform Act, have made it more difficult for working families to purchase homes by increasing expenses and pushing lenders, particularly community banks, out of the mortgage lending market. To address this, the EO directs:

• The Consumer Financial Protection Bureau (CFPB) to consider amendments to its mortgage regulations, including the Ability-to-Repay/Qualified Mortgage (ATR-QM), TILA-RESPA Integrated Disclosure (TRID), and Mortgage Servicing rules. The order specifically directs CFPB to consider exempting small-dollar mortgages from the ATR-QM rule’s fee cap and removing the TRID requirement that borrowers receive a disclosure within a certain amount of time before loan closing.
• CFPB to modernize its Home Mortgage Disclosure Act (HMDA) requirements to expand the exemption for small lenders and reduce the amount of information requested and collected.
• FHFA and federal banking regulators to take several steps to enhance the Federal Home Loan Banks’ (FHLBs) ability to support affordable home purchase lending and construction. These include reforming the FHLBs’ Affordable Housing Programs so they better support small-scale and for-ownership housing projects; expanding access to longer-duration FHLB advances secured by home purchase loans; and creating targeted FHLB liquidity programs for entry‑level housing, owner‑occupied purchase loans, and small single-family home builders.
• FHFA and federal banking regulators to modernize their appraisal standards to take advantage of new tools such as alternative valuation models, desktop and hybrid appraisals, and artificial intelligence.
• The Federal Housing Administration (FHA) and U.S. Department of Veterans’ Affairs (VA) to align their appraisal standards.
• Federal banking regulators to examine their capital standards and other regulations and adjust their enforcement practices to better encourage bank mortgage lending and servicing activities.
• FHA, VA, and USDA to eliminate any unnecessary “wet” signature requirements in their mortgage insurance programs and allow for more documents to be signed electronically.