It is almost a full-time job trying to keep up with the real estate policy news coming out of the White House but as of today here is what I could find from credible news sources:
1) 50 year mortgages are off the table. Per an article on WRE News last week, "In November, Federal Housing Finance Agency Director Bill Pulte encouraged President Trump to float the idea for the 50-year mortgage. But after a backlash from many conservative allies and no great support from the financial services industry, Pulte bluntly announced the proposal was off the table."
2) Early this month, President Donald Trump said the United States will purchase $200 billion in mortgage bonds, with the goal of bringing down housing costs. Mortgage rates did respond favorably to the news, with daily 30-year rates dipping under 6% for the first time in nearly three years following the news. In theory, Realtor.com said, increasing Fannie and Freddie’s MBS holdings should be favorable for mortgage rates through the laws of supply and demand. Increasing demand for mortgages makes them more valuable, encouraging lenders to originate more loans at more competitive rates, the website said. However, with a total U.S. market for mortgage bonds estimated at around $12 trillion, it’s unclear whether the $200 billion buying program would be enough to make much of a difference in the long run.
3) In hopes of helping make home buying more accessible, President Trump indicated he is drafting an executive order to allow people to take money out of their retirement and college savings accounts to use for a downpayment. Both Politico and Bloomberg Law (BL) reported on this. BL indicated it will take a rules change, and possibly a new law, to make this happen. Both the IRS and the Labor Department’s Employee Benefits Security Administration have rules about when and how a plan participant can begin to take distributions. Currently, if they do so before reaching age 59 ½, they face a 10% penalty, plus income tax.
4) According to the Politico article the executive order will also include an action for banning large investors from buying single-family homes. “For a very long time, buying and owning a home was considered the pinnacle of the American Dream,” Trump said in a post on Truth Social, adding “that American Dream is increasingly out of reach for far too many people.” This is one of the things he believes will help address that issue.
Those in the know on various media sources indicate that he will unveil his plans this week at the World Economic Forum in Switzerland.
