In our ongoing effort to keep you informed about the Trump Administration’s policy changes affecting the housing market, we present this analysis of recent executive orders and policies, along with their potential implications.
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- Executive orders
- Federal employees
- Consumer Financial Protection Bureau
- Tariffs and Trade Policies
- HUD, FHFA, Fannie and Freddie
Trump’s Executive Orders
Continuing the Reduction of the Federal Bureaucracy
What Happened: On March 14, 2025, President Trump signed the executive order titled “Continuing the Reduction of the Federal Bureaucracy.” This order mandates the elimination or reduction of certain federal entities deemed unnecessary, including the United States Interagency Council on Homelessness (USICH) and the Community Development Financial Institutions Fund (CDFI Fund).
Who's Impacted:
- Homeless Assistance Programs: Organizations relying on federal coordination through the USICH may face challenges in addressing homelessness effectively.
- Community Development Financial Institutions: Financial entities that provide affordable lending to low-income communities could experience reduced support, affecting their ability to finance affordable housing projects.
Why It Matters: The reduction or elimination of these agencies may lead to decreased federal support for programs aimed at combating homelessness and promoting affordable housing. This could result in increased strain on local governments and nonprofits to fill the gap, potentially slowing down efforts to address housing affordability and homelessness. However, supporters argue that streamlining federal housing programs could reduce redundancy, improve funding efficiency, and give states more control over resource allocation.
Additional Rescissions of Harmful Executive Orders and Actions
What Happened: On March 14, 2025, President Trump issued an executive order titled “Additional Rescissions of Harmful Executive Orders and Actions,” which rescinds several prior directives, notably revoking Executive Order 14026, which had increased the minimum wage for federal contractors.
Who's Impacted:
- Federal Contractors and Workers: Companies engaged in federal contracts and their employees, particularly those in construction and maintenance roles related to housing projects, may be affected by changes in wage requirements.
Why It Matters: Lowering the minimum wage for federal contractors could reduce labor costs for housing-related federal projects. While this might decrease expenses for some projects, it could also impact the livelihoods of workers and potentially affect the quality of work if lower wages lead to reduced worker retention and morale. Conversely, some industry groups argue that lower wage floors can help businesses hire more workers, boost job creation in housing projects, and cut costs for taxpayers.
Restoring Public Service Loan Forgiveness
What Happened: On March 7, 2025, an executive order was signed to modify the Public Service Loan Forgiveness (PSLF) program, potentially disqualifying employees of organizations engaging in activities deemed to serve a “substantial illegal purpose.”
Who's Impacted:
- Nonprofit and Public Sector Employees: Individuals working in housing-related nonprofits or public agencies could be affected if their organizations are classified under the new criteria.
Why It Matters: Changes to the PSLF program could deter professionals from working in certain housing-related nonprofits or public agencies, potentially leading to staffing shortages in critical housing assistance programs. This may hinder efforts to provide affordable housing and support services to vulnerable populations. The administration has defended the move, stating that it aims to ensure taxpayer dollars aren’t funding organizations with questionable finances, promoting greater public sector accountability.
Federal Employees; Hiring, Funding, and Regulatory Freeze
What Happened:
- Federal Workforce Reduction: The executive order on reducing the federal bureaucracy mandates that agencies submit plans for mass layoffs and budget cuts, aiming to streamline operations and reduce waste.
- Hiring and Funding Freeze: A hiring freeze has been implemented across various federal agencies, with exceptions for specific sectors like law enforcement and national security. This freeze affects staffing in agencies such as the Department of Housing and Urban Development (HUD), potentially delaying housing programs and services.
- Regulatory Review: A comprehensive review of federal regulations has been ordered to identify and eliminate those deemed unnecessary or burdensome, which may impact housing policies and programs.
Who's Impacted:
- Federal Agencies like HUD: May face staffing shortages, delayed program rollouts, and limited capacity to administer housing initiatives.
- Public Sector Employees: Workers in housing-related agencies could be at risk of job loss or face uncertainty about future roles.
- Communities Relying on Housing Programs: May experience service delays or reduced support due to agency downsizing.
Why It Matters:
These measures could slow the implementation of housing programs and delay assistance to vulnerable communities. Critics argue that staffing cuts and budget freezes threaten the effectiveness of critical housing services. Supporters, on the other hand, believe streamlining agencies will reduce waste, increase efficiency, and refocus resources on core government functions.
Consumer Financial Protection Bureau (CFPB)
What Happened:
While no specific executive orders have recently targeted the CFPB, the agency is currently undergoing review as part of a broader federal regulatory overhaul. This review may result in changes to its authority and its role in enforcing housing finance-related consumer protections.
Who's Impacted:
- Homebuyers and Mortgage Borrowers: May face changes in how consumer protections are enforced in mortgage lending.
- Lenders and Financial Institutions: Could see reduced regulatory burdens and increased flexibility in lending practices.
- Consumer Advocates: Organizations focused on housing finance oversight may face challenges in ensuring accountability.
Why It Matters:
Changes to the CFPB’s authority could shift the balance between consumer protection and lender flexibility. Critics worry this could open the door to riskier lending practices and fewer safeguards for borrowers, while supporters argue it may streamline compliance, promote innovation, and make credit more accessible.
Tariffs and Trade Policies
What Happened:
The administration has announced and implemented a 25% tariff on imports of steel and aluminum, effective March 12, 2025. This action is expected to increase construction costs, impacting housing affordability.
Who's Impacted:
- Homebuilders and Developers: Higher material costs could increase construction expenses.
- Homebuyers: Rising construction costs may be passed on to buyers, affecting affordability.
- Domestic Manufacturers: U.S.-based steel and aluminum producers may benefit from reduced foreign competition.
Why It Matters:
The tariff is expected to raise the cost of building materials, potentially driving up home prices and slowing new housing development. However, supporters argue that the policy protects domestic industries, encourages local job growth, and strengthens supply chain resilience.
HUD, FHFA, Fannie Mae and Freddie Mac
What Happened:
- Program Funding: Budgetary constraints resulting from the federal workforce reduction and funding freezes may lead to decreased funding for HUD programs, affecting affordable housing initiatives and community development projects.
- Policy Revisions: The FHFA may revise policies related to mortgage lending and housing finance, potentially altering the availability and terms of home loans.
- Staff Firings: On March 20, 2025, New FHFA Director Bill Pulte fired Freddie Mac CEO Dianna Reid, and placed FHFA COO Gina Cross and FHFA HR Director Monica Matthews on leave. This came after Pulte fired 14 members from the Fannie Mae and Freddie Mac’s board of directors and appointed himself as chairman of both. However, that self-appointment breaks U.S. Code Title 12 of the Federal Housing Finance Regulatory Reform Act of 2008.
Who's Impacted:
- Homebuyers and Mortgage Borrowers: Changes to FHFA policy and GSE oversight may affect mortgage accessibility, interest rates, and loan availability.
- Affordable Housing Programs: Reduced HUD funding may delay or scale back community development and housing assistance projects.
- Housing Market Stakeholders: Lenders, real estate professionals, and developers may see shifts in market dynamics as GSE reform unfolds.
Why It Matters:
These moves are steps in the administration’s effort to privatize the government-sponsored enterprises (GSEs) of Fannie and Freddie, which back about half of U.S. mortgages. Among other things, privatizing the GSEs would likely usher in the potential for riskier loans and higher interest rates, alongside shareholder profiteering. Supporters see it as a way to cut taxpayer exposure, boost competition, and modernize mortgage finance.
The bottom line
These executive actions reflect a shift in federal policy that could have significant implications for the housing market.
Stakeholders, including housing advocates, developers, and policymakers, should closely monitor these changes to assess their impact on housing affordability, availability, and quality.
Proactive engagement and adaptation to these policy shifts will be crucial in navigating the evolving landscape of housing in the United States.
Note: The analysis above is based on information available as of March 20, 2025. For the most current updates, please refer to official government publications and trusted, independent news sources.
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