The President signed two executive orders on Friday targeting America’s housing affordability crunch: one aimed at making it easier and cheaper to build homes, the other at getting more lenders back into the mortgage market.
Order #1: “Removing Regulatory Barriers to Affordable Home Construction”
The Core Issue
Red tape is expensive. Regulatory costs account for nearly $94,000 of the final price of a new single-family home, and green energy mandates in building codes can add more than $30,000 on top of that. The administration’s view is that government – at every level – has made building homes unnecessarily slow and costly.
What It Does Federally
The EPA and Army Corps of Engineers are directed to revisit wetlands, stormwater, and water-related permitting requirements, while the Departments of Commerce, HUD, and Transportation, along with the FHFA, are told to clean up rules that are holding back residential development. On the environmental review side, the Council on Environmental Quality is directed to expand categorical exclusions under NEPA: effectively letting more housing projects skip the lengthy federal environmental review process entirely.
Nudging States and Cities
The federal government can’t rewrite local zoning laws, so instead it’s using money as leverage. HUD is directed to develop a set of best practices for states and cities, then tie federal grant programs and technical assistance to whether those governments actually follow through a carrot-and-stick approach to pushing local regulatory reform. Those best practices include streamlined permitting, scaled-back green energy construction mandates, and fewer restrictions on manufactured and modular housing.
Tax Incentives
Treasury and HUD are also directed to look at linking Opportunity Zone tax incentives to single-family home construction and potentially tying them to the New Markets Tax Credit program in qualifying areas.
What It Can’t Do
The order stops short of touching state and local zoning codes; the administration has been clear it wants to preserve suburban housing, not push for higher density. That matters because most of the real barriers to building more homes sit at the city and county level, not in Washington.
Order #2: “Promoting Access to Mortgage Credit”
The Core Issue
Since the 2008 financial crisis, banks… especially smaller community banks have steadily pulled back from mortgage lending. The post-Dodd-Frank wave of regulations hit community banks hardest, undermining their businesses, pushing credit risk outside the traditional banking system, and leaving rural and lower-income borrowers with fewer options.
Easing the Rules for Smaller Lenders
The CFPB is instructed to look at tailoring its Ability-to-Repay and Qualified Mortgage rules for community banks and smaller banks with assets under $100 billion. Bank examiners would also be expected to shift their focus: less emphasis on paperwork and technical compliance, more on whether the borrower can actually afford the loan.
Capital Requirements
Banking regulators are directed to reform capital and liquidity rules, including adjusting risk weights to better match actual credit risk, expanding Federal Home Loan Bank access for residential mortgage assets, and creating targeted liquidity programs aimed at entry-level housing and small residential builders.
Modernizing Appraisals
The order pushes for AI-driven automated valuation models to replace or supplement traditional appraisals, simplifies the appraiser qualification process, and looks to reduce appraisal requirements altogether for lower-risk loans like straightforward refinances.
Going Paperless
HUD, the VA, and other agencies are directed to drop wet-signature requirements and move toward a standardized system of electronic signatures and remote online notarization; essentially pushing the mortgage closing process fully into the digital age.
Follow-Up Required
The FHFA Director has 120 days to deliver a report evaluating how well the national housing finance market is functioning and what further regulatory or legislative fixes might be needed.
The Bigger Picture
These two orders are part of a three-part housing strategy the administration has been building:
- Fannie Mae and Freddie Mac have been directed to purchase $200 billion in mortgage-backed securities to help push borrowing costs down.
- An earlier order took aim at large institutional investors buying up single-family homes that would otherwise be available to families.
- Both orders will still need to go through formal agency rulemaking — meaning legal and political challenges from environmental groups or consumer advocates are likely, and the real-world impact for buyers could be months or years away.
One tension worth noting: The President has previously said he doesn’t want a flood of new construction driving down home values for people who already own. At his January Cabinet meeting he put it plainly: “People that own their homes, we’re going to keep them wealthy. We’re going to keep those prices up.” That’s a real constraint on how far these supply-side orders are likely to go in practice.
