Section 5 of President Trump’s Oct. 22 housing order tells the Secretaries of Agriculture and Veterans Affairs to reduce the interest rates their departments charge on single-family home loans they make directly. The order, Executive Order 14438, attaches two conditions. The cuts must be consistent with applicable law, including two federal statutes it cites, and they depend on “available appropriations.” It sets no new rate, no dollar amount and no date.
The order does not name specific loan programs. Its wording covers loans “made directly by their respective departments,” so a mortgage that a bank or credit union makes with a VA or USDA guarantee behind it is a loan the departments did not make. The departments’ own pages show where direct lending happens: the Section 502 program at USDA Rural Development and the Native American Direct Loan at VA.
For a borrower, the question is who made the loan. Someone holding a Section 502 loan from Rural Development, or a Native American Direct Loan from VA, holds the kind of loan Section 5 describes. Someone whose lender is a private bank, even with a federal guarantee, does not, and the order gives that borrower no new rate.
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What does USDA’s direct loan charge today?
USDA’s Single Family Housing Direct Home Loans page, last modified Oct. 29, 2026, says the program “assists low- and very-low-income applicants” in eligible rural areas. The interest rate is fixed and is set by market rates at loan approval or closing, whichever is lower. Effective Oct. 1, 2026, the page lists 5.750 percent for low- and very-low-income borrowers.
Payment assistance can bring the effective rate down “as low as 1%,” according to the page. It is a subsidy that reduces the mortgage payment for a short time, based on adjusted family income, and borrowers must repay all or part of it when the property title transfers or they stop living in the home. Terms run up to 33 years, or up to 38 years for very-low-income applicants who cannot afford the 33-year term.
The loans are made directly by Rural Development, which determines eligibility and loan amounts, and applications go through local Rural Development offices year-round. A down payment is typically not required, though applicants with assets above the program’s limits may have to use some of them. The home must be the buyer’s primary residence.
Who can get a VA direct loan?
VA’s Native American Direct Loan page, updated Oct. 30, 2026, describes a program for Native American veterans, and non-Native veterans married to a Native American, who want to buy, build or improve a home on federal trust land or refinance an existing Native American Direct Loan. Applicants need a tribal agreement with VA, a valid VA home loan Certificate of Eligibility, acceptable credit, proof of sufficient income and plans to live in the home.
The page says the current rate on that program “starts at 2.47%” on a 30-year fixed mortgage and tells veterans to contact a Native American Direct Loan coordinator for their own rate. On a loan with no down payment, borrowing is generally capped at the Fannie Mae and Freddie Mac conforming loan limit, with higher limits in some high-cost counties. A one-time VA funding fee may apply, and lenders can also charge interest and closing fees.
What does “available appropriations” do to a rate cut?
It ties the directive to money Congress provides. Section 6 of the order says the whole order is to be carried out consistent with applicable law and subject to the availability of appropriations, and that it is not intended to, and does not, create any right or benefit. The order does not say how the departments are to lower the rates, and the White House fact sheet repeats the direction without a rate, an amount or a timeline.
Section 5 is one piece of a wider order. The same document also asks the Federal Housing Finance Agency director to consider fee cuts on some Fannie Mae and Freddie Mac refinances, sets up a pilot on mortgage insurance and creates a task force on manufactured housing. The direct-loan directive is the only part aimed at the two departments’ own lending.
Watching for a lower rate on a USDA or VA direct loan?
The order tells the departments to lower direct-loan rates but names no rate and no date, and it depends on appropriations. A borrower who is waiting for a cut is still paying the home insurance, the property tax and the upkeep that come with the house.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
