President Donald Trump signed two executive orders on March 13, 2026, addressing what his administration has described as the most pressing domestic affordability challenge facing American families: the soaring cost of housing. The twin orders — “Promoting Access to Mortgage Credit” and “Removing Regulatory Barriers to Affordable Home Construction” — represent the most comprehensive federal executive action on housing supply and finance in years and signal that the Trump administration views the housing crisis as both an economic priority and a political imperative heading into the 2026 midterm elections.
The orders follow Trump’s commitment in his State of the Union address in February 2026 that housing affordability would be a signature priority for his second term, and build on earlier actions including the direction to Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities. They also complement the recently passed 21st Century ROAD to Housing Act — a bipartisan housing bill that passed the Senate on March 12, which includes a ban on large institutional investors purchasing single-family homes.
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The Mortgage Credit Executive Order: Reshaping How Home Loans Are Made
The first executive order takes aim at the regulatory framework that governs mortgage origination, underwriting, servicing and appraisal. At its core, the Mortgage EO asserts that statutory and regulatory changes adopted over the past two decades — including rules under the Dodd-Frank Act — have increased compliance costs for mortgage origination and servicing, distorted the market structure and significantly reduced bank participation in mortgage lending, particularly among community and smaller banks.
The order directs the Consumer Financial Protection Bureau (CFPB) to appropriately tailor mortgage rules to help enable smaller banks to facilitate more affordable lending, including modernising and streamlining regulatory and documentation requirements. It calls on federal banking regulators — including the Federal Reserve, the OCC, the FDIC and the NCUA — to revise supervisory guidance to focus on prudent underwriting rather than overly technical process-oriented approaches, and to support construction lending by community banks.
A key directive concerns the Home Mortgage Disclosure Act (HMDA) reporting requirements. The CFPB is directed to modernise HMDA requirements to reduce compliance burdens and protect borrower privacy — a reform that smaller lenders have long advocated, arguing that the current reporting regime is disproportionately onerous for institutions with limited compliance infrastructure.
On construction lending, the order directs banking regulators to consider revising supervisory guidance to exclude one-to-four-family residential development and construction lending from commercial real estate concentration guidance. This reform would make it easier for community banks to participate in residential construction financing without triggering concentration limits that currently treat such loans as part of the broader commercial real estate exposure category — a categorisation that has discouraged smaller banks from making construction loans and contributed to the housing supply shortage.
The order also directs the Federal Housing Finance Agency (FHFA) to submit a report within 120 days on the efficiency of national housing finance markets and to identify recommendations for regulatory or legislative changes. On appraisals, the order calls for appraisal modernisation — a reform area that has gained significant attention as appraisal delays have been identified as a meaningful source of friction in the home purchase process, particularly for lower-value properties in underserved markets.
The Construction Executive Order: Cutting Federal Red Tape
The second executive order addresses the supply side of the housing equation — the regulatory barriers that delay construction, restrict development and drive up the costs of new housing at both the federal and local levels. The Construction EO directs the EPA Administrator and the Secretary of the Army to review and revise stormwater, wetlands and other water-related permitting requirements to reduce building and ownership costs, streamline federal regulatory approvals and increase home insurability.
The Environmental Protection Agency’s permitting processes, particularly those related to the Clean Water Act, have long been identified by homebuilders as a significant source of project delays. The order directs the agencies to reduce these burdens in a manner that maximally exempts or reduces the regulatory load on housing construction, preservation and adaptive re-use — without, in theory, undermining the underlying environmental protections that the permitting requirements are designed to maintain.
The order also directs the Chairman of the Council on Environmental Quality to provide guidance on implementing the National Environmental Policy Act (NEPA) in a way that maximally exempts housing construction and related infrastructure from its requirements or reduces the associated burdens. For large residential developments, NEPA reviews can add years to project timelines — a reality that makes large-scale affordable housing development economically challenging in many markets.
One of the most practically significant provisions creates a best practices framework for state and local government housing regulation. Federal agencies are directed to incorporate these best practices as a criterion for awarding discretionary grants — effectively creating financial incentives for state and local governments to streamline their own permitting and regulatory processes. One example cited by the White House is a 60-day deadline for approving building permits — an aspiration that, if implemented broadly, could significantly accelerate the pace of new residential construction across the country.
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The Problem This Is Designed to Solve
To understand why these executive orders matter, consider the scale of the housing affordability crisis that prompted them. The multiyear shortage of construction — driven by regulatory barriers, labour shortages, materials cost inflation and restrictive local zoning — has kept housing prices elevated even as mortgage rates have partially declined from their 2023-2024 peaks. Many existing homeowners remain locked into their current properties, unwilling to sell and give up low-rate mortgages originated before the rate cycle turned. The combination of supply shortage and demand suppression has created a market characterised by low transaction volumes, high prices and limited options for first-time buyers.
HUD Secretary Scott Turner framed the problem in political terms at the order signing: “Homeownership is the bedrock of the American Dream, but that foundation crumbled under the Biden administration as red tape made building homes and securing mortgages increasingly more expensive.” The administration’s theory is that reducing regulatory barriers on both the supply side (construction) and the demand side (mortgage access) will simultaneously increase housing stock, lower costs and expand the pool of creditworthy borrowers able to participate in the market.
Legal Context: What Changes Require Rulemaking
The Mayer Brown legal analysis of the two executive orders is an important corrective to any expectation of immediate market impact. The executive orders issue directives to federal regulators and agencies, but they do not themselves change any rules. Most of the changes the orders contemplate — particularly in the mortgage regulatory space — will require notice-and-comment rulemaking under the Administrative Procedure Act. This process typically takes twelve to eighteen months from initiation to final rule — meaning that the practical effects of the Mortgage EO are likely to be felt in 2027 and beyond rather than 2026.
Federal banking regulators are expected to propose new capital rules for mortgage lending on March 19, 2026 — a signal that the regulatory response to the executive orders is already being mobilised. For mortgage professionals, the immediate implication is not a change in current rules but a signal that the regulatory environment is shifting — and that the coming months will bring formal proposals for comment on some of the most complex and commercially significant aspects of the mortgage regulatory framework.
The Construction EO’s 60-day timeline for federal agencies to develop best practices for state and local governments is more immediately actionable, but the extent to which states and localities actually adopt those practices remains entirely voluntary and uncertain. Given the large patchwork of state and local housing regulation across the United States — with zoning authority concentrated at the municipal level — federal executive action can only encourage rather than mandate local regulatory reform.
Market Implications: Homebuilders, Mortgage Lenders and Communities
The executive orders have generated a broadly positive response from industry participants. The National Mortgage Professional analysis suggests that for loan originators, the directive signals that some of the most complex parts of the mortgage regulatory framework — disclosure, underwriting, servicing and appraisal rules — could soon be revised. If regulators ultimately follow through, the changes could reduce compliance burdens, expand flexibility for underwriting outside strict agency guidelines, speed up loan closings through appraisal modernisation and encourage community banks to re-enter the mortgage market.
For potential homebuyers — particularly first-time purchasers and households in underserved communities who may have been excluded from mortgage eligibility by overly restrictive underwriting standards — the orders carry a meaningful promise. If their implementation succeeds in expanding credit access without sacrificing loan quality, more creditworthy borrowers will be able to participate in homeownership markets that have been effectively closed to them.
The HUD’s plan to align Opportunity Zone incentives with single-family home development and New Markets Tax Credit programmes provides an additional tool for directing construction activity toward communities that have experienced significant housing deprivation. Opportunity Zones have already created more than 400,000 housing units in distressed communities, and aligning these incentives with single-family development could accelerate this pipeline.
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Photo Source: Google
By: Montel Kamau
Serrari Financial Analyst
19th March, 2026
