President Trump signed Executive Order 14438 on Oct. 22, and one section of it tells the Federal Housing Finance Agency to set up a pilot that would cancel mortgage insurance premiums for borrowers who have built enough equity. The order does not cancel anyone’s premium. The pilot happens only if the agency’s director decides it serves the public, and it would reach only loans made after the pilot exists.
That last limit matters most for homeowners who already pay private mortgage insurance, the monthly charge lenders add when a down payment is under 20 percent. Someone who closed a loan last year gains nothing from the order as written, and no start date, dollar saving or equity percentage has been announced.
What does the order actually require of the FHFA?
The White House fact sheet says the order “directs the Director of the Federal Housing Finance Agency (FHFA) to create a pilot program to cancel borrowers’ mortgage insurance premiums proactively once they have satisfied their equity requirements based on the current market value.” The fact sheet says the pilot “will eliminate a large monthly expense for qualifying Americans,” but it gives no percentage, no eligibility list and no deadline.
The fuller text is in Section 2 of the order itself, titled “Proactive Cancellation of Excessive Mortgage Insurance.” There the FHFA Director acts only “if he determines that it is in the best interests of” Fannie Mae and Freddie Mac, the agency and the American public. If the Director so determines, the two companies would run the pilot on single-family loans they own, guarantee or securitize.
Who would be covered, and who is left out?
The order says the pilot is “applicable only to mortgages made after the establishment of the pilot program.” Borrowers with existing Fannie Mae or Freddie Mac loans are therefore outside it, as the Consumer Finance Monitor legal blog also noted on Oct. 26. Loans insured through the Federal Housing Administration are not mentioned in the section.
Homeowners who expect to buy or refinance after the pilot starts are the ones with something to track. For them the practical question is whether a new loan with mortgage insurance would be reviewed for cancellation without the borrower having to ask, and what the equity test turns out to be once the FHFA publishes it.
Retirement deadlines, in your inbox: Miss an enrollment or claim deadline and the money can be gone. Join the Retirement Money Brief and we’ll send you our Property Tax & Utility Relief Finder as a welcome gift.
Get the Brief + the relief finder →
We may earn a commission from links on this page.
How would an equity test work, and how does it differ from today’s rule?
Under the order, mortgage insurance would be cancelled when the Enterprise determines that the borrower meets equity requirements based on current market value, measured with an automated valuation model or another approved method. The Enterprise must also find that cancellation is consistent with financial safety and soundness and with its contractual obligations, and that the borrower meets every other statutory, contractual and regulatory requirement. Payment-history requirements would follow procedures the Director sets.
The Consumer Finance Monitor analysis, written by attorneys Richard Andreano Jr. and John Culhane Jr., says the Enterprises would periodically review loans and use automated valuation models and other data to find borrowers who appear to qualify. Servicers, to the extent permitted by law and operationally feasible, would be told to notify borrowers promptly and to cut unnecessary paperwork and appraisal costs.
That is a shift from the Homeowners Protection Act, which the same analysis summarizes: a borrower can ask to drop the insurance when the balance is scheduled to reach, or reaches, 80 percent of the home’s value, and the insurance ends automatically when the balance is scheduled to reach 78 percent. The pilot’s test would instead be built on current market value.
Why the order promises no savings yet
Section 6 of the order says it is to be implemented consistent with applicable law and subject to the availability of appropriations. It also states that it “is not intended to, and does not, create any right or benefit, substantive or procedural,” that any party could enforce. No borrower can point to the order to demand a cancellation.
The same order has other parts, which are outside this story: a title-insurance waiver pilot, a manufactured-housing task force and a direction to the Agriculture and Veterans Affairs departments on loan interest rates. For mortgage insurance, the 180-day deadline that appears in the order applies to the task force, not to this pilot, so no date has been set for when the FHFA must act or when any borrower might see a change.
What homeowners paying mortgage insurance can check now
Nothing in the order changes what a current borrower owes this month. Anyone with private mortgage insurance on an existing loan can still use the 80 percent request right and the 78 percent automatic termination under current law, and the servicer’s statement shows the balance and the insurance charge. Comparing the loan balance with a recent estimate of the home’s value shows how close a loan is to those marks.
For people weighing a purchase or a refinance in the coming months, the open item is whether the FHFA Director makes the determination at all, and what equity level the Enterprises then set. Until the agency announces that, any monthly saving from the pilot is a possibility, not a number.
Is the equity in the house working as hard as it could?
A pilot that may never start, and that would reach only future loans, gives no help to a homeowner paying mortgage insurance or other house costs today. The equity already built is the asset in play, and the choices for using it carry real risk.
Cut Your House Costs is an 11-page guide to ten moves for spending less on the house and protecting its value. It includes home equity options compared, from a HELOC to a reverse mortgage, plus a home-cost audit worksheet for going through the bills line by line.
Compare HELOC and reverse mortgage options in the Cut Your House Costs guide →
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.
