Outdated rules and unnecessary regulations have made the path to homeownership more difficult than it needs to be, especially for first-time homebuyers and working families.
At the U.S. Department of Housing and Urban Development (HUD), we’re carrying out President Trump’s Presidential Memorandum to repeal policies that hurt the housing market and other key business sectors, so we can help more Americans fulfill the American dream of owning a home.
Through five mortgagee letters, HUD’s Federal Housing Administration (FHA) rescinded more than 12 sub-regulatory policies under its single-family mortgage insurance program. These onerous policies increased housing costs and the time it took for first-time homebuyers to buy a home.
Specifically, the recissions cut down on antiquated and expensive appraisal protocols, impractical underwriter requirements and frivolous supplemental consumer information requirements, among other regulations.
Our deregulatory campaign takes a multi-pronged approach.
Streamlining appraisals
We are streamlining the appraisal process by rescinding unnecessary appraisal protocols and aligning FHA practices with industry standards. Historically, borrowers and industry stakeholders viewed FHA appraisals as more complicated, costly and inefficient compared to more conventional appraisals.
These stringent FHA-specific requirements remained in effect despite advances in collateral risk management practices and technology. To adapt to the evolving landscape, FHA is modernizing these protocols and related IT platforms.
Investing in technology
FHA continues to build off IT initiatives that began during the first Trump administration, investing in the FHA Catalyst platform to improve our collateral valuation analytics. Coupling this improvement with streamlined appraisal protocols helps lower costs and shorten appraisal turnaround times for American homebuyers.
Changing underwriter requirements
We are also helping to remove operational barriers in FHA programs by repealing full-time direct endorsement underwriter requirements for direct endorsement underwriter eligibility. This rescission permits part-time employment for underwriters, reducing lender origination costs and empowering lenders to better manage staff needs and ultimately better serve the prospective homebuyer.
Reducing paperwork
And we are eliminating burdensome mandated reporting by lifting the requirement to complete the supplemental consumer information form. The form required mortgagees to increase their information collection regarding the borrower’s language preference and homeownership education for very limited benefit.
In Fiscal Year 2024, only 1.2 percent of borrowers who completed this form reaped any potential benefit. Instead, this rule placed an additional operational burden on mortgagees, which trickled down to homebuyers. Rescinding this policy removes another paperwork hurdle in Americans’ journeys toward homeownership.
All of these policy rescissions simplify processes, reduce financing costs, and strengthen the housing market, fostering a more effective FHA-insured lending process.
Maximizing efficiency is a core part of our mission at HUD, so we can better serve the American people and remain good stewards of precious taxpayer resources.
These rescissions will also particularly help first-time homebuyers. We recognize that the average age of first-time homeownership is too high, which hampers family formation and wealth-building opportunities for younger Americans.
That’s why, through these reforms, we can better ensure that first-time homebuyers — young families, newlywed couples, single parents and any hardworking American who has saved enough for down payment and can responsibly own a home — will have a viable option available to finance the purchase of their first home and become financially self-sufficient homeowners.
At HUD, we’re determined to make the American dream of homeownership a reality for all, and these FHA rescissions bring Americans one step closer to realizing that dream.
Scott Turner is the 19th Secretary of the U.S. Department of Housing and Urban Development (HUD).
