Trump’s Executive Orders on Housing Would Ease Affordability Crisis

President Trump on March 13 issued two executive orders on housing to remove regulatory barriers and provide better access to mortgage credit that will help ease the nation’s housing affordability crisis.

“The president’s executive order to remove regulatory barriers will enable builders to build more housing by reducing red tape, streamlining permitting requirements and easing costly environmental regulations,” said NAHB Chairman Bill Owens. “The executive order for access to mortgage credit also takes important steps to provide better financing options for home buyers and home builders and make it easier for families to achieve the American dream of homeownership.”

The executive order on regulatory barriers calls for the Environmental Protection Agency and U.S. Army Corps of Engineers to support federal permitting reforms for residential construction under both wetlands and stormwater requirements. It also calls on the chairman of the Council on Environmental Quality to issue guidance maximizing categorical exclusions under the National Environmental Policy Act for housing construction and related activities.

The order also does the following:

• Directs the Secretary of Commerce, Secretary of Housing and Urban Development, Secretary of Transportation, and the Director of the Federal Housing Finance Agency (FHFA) to eliminate unduly burdensome rules and reform programs that constrain residential development and housing affordability.
  
  
• Calls on the Secretary of Agriculture, Secretary of Housing and Urban Development, Secretary of Energy, and the Director of the FHFA to eliminate or reform overly burdensome energy, water and alternative-energy requirements for housing, including manufactured homes.
  
  
• 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.
  
  
• Encourages new home construction by aligning Opportunity Zone incentives with single-family home development and New Markets Tax Credit programs.

The executive order to expand credit access to home buyers and home builders directs federal banking regulators to:

• Revise supervisory guidance to support responsible construction lending by community banks and explore opportunities to expand financing options for small home builders.
  
  
• Modernize appraisal regulations by expanding alternative valuation models, reducing unnecessary appraisal requirements for low-risk transactions, setting clearer timelines for appraisals and simplifying appraiser qualification requirements.
  
  
• 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.
  
  
• Consider whether to adopt new supervisory criteria that promote portfolio mortgage servicing as a core community banking function and otherwise take other actions that lower barriers to entry and costs of operation for community banks in the mortgage lending business.

This executive order also 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. Furthermore, it replaces current loan disclosure rules with an improved standard, thereby reducing closing delays.

“The president’s executive orders get at the root of the housing affordability problem by eliminating obstacles to build more homes and providing better access to financing,” said Owens. “NAHB looks forward to working with the Trump administration to implement these important directives.”