Last week, President Trump signed two housing-related Executive Orders (EO) Removing Regulatory Barriers to Affordable Home Construction and Promoting Access to Mortgage Credit.

Yes, but: While both EOs are primarily focused on single-family homeownership, they signal a policy shift toward supply-side deregulation and expanded credit availability.

Key Items from the Removing Regulatory Barriers to Affordable Home Construction EO:

  • Directs several agencies to review and revise, eliminate or reform
    • Water-related permitting requirements;
    • Unduly burdensome rules and reform programs that constrain residential development and housing affordability; and
    • Overly burdensome energy, water, and alternative-energy requirements for housing, including manufactured homes.
  • The Chairman of the Council on Environmental Quality is directed to issue guidance maximizing categorical exclusions under NEPA for housing construction and related activities.
  • The Advisory Council on Historic Preservation is directed to develop guidance simplifying historic preservation reviews to reduce barriers to building housing and related infrastructure.
  • Calls for Federal agencies to provide incentives to State and local governments that adopt regulatory best practices to speed up permitting, curtail green building codes, reduce costly design and building mandates, enable innovative home construction methods, and extend residential development.

Key Items from the Promoting Access to Mortgage Credit EO:

  • Directs the Consumer Financial Protection Bureau (CFPB) to appropriately tailor mortgage rules to help enable smaller banks to facilitate more affordable lending, including modernizing and streamlining regulatory and documentation requirements.
  • Calls for Federal banking regulators to revise supervisory guidance to focus on prudent underwriting, rather than overly technical process-oriented approaches to lending, and to support construction lending by community banks.
  • Directs Federal banking regulators to engage in responsible, safe, and efficient reforms to capital and liquidity rules to remove undue burdens on lending, such as tailoring risk weights to the material credit risk of the exposure, expanding access to longer-dated Federal Home Loan Bank (FHLB) advances tied to residential mortgage assets, and creating targeted FHLB liquidity programs for entry-level housing, owner-occupied purchase loans, and small residential builders.

Go Deeper: The fact sheets accompanying the EOs reference direction to Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities to further drive down borrowing costs.