President Donald J. Trump signed an executive memorandum Wednesday initiating the process of reforming the United States housing system, which includes an objective to examine the “financial viability” of the Home Equity Conversion Mortgage (HECM) program.
The president has expressed his intent to end the conservatorship of Freddie Mac and Fannie Mae that has been in effect since September 2008, and he has also directed the Secretary of the Treasury, Stephen Mnuchin, and the Secretary of Housing and Urban Development, Dr. Ben Carson to, “craft administrative and legislative options for housing finance reform,” according to a statement released by the White House.
The Department of Housing and Urban Development (HUD) will, “prepare a reform plan for the housing finance agencies it oversees,” the statement reads. One of the housing finance agencies it oversees is, of course, the Federal Housing Administration (FHA).
The memorandum itself also provides guidance to the president’s Cabinet officials on recommended framework through which to reform HUD and FHA programs. Among the objectives the White House hopes to see from any HUD reform proposal is, “Addressing the financial viability of the Home Equity Conversion Mortgage program.”
The president hopes to work with Congress to address these issues of reform, according to the White House statement. The Republican-controlled United States Senate is likely to endorse the White House’s reform plans with relative enthusiasm, while opposition in the Democratically-controlled House of Representatives is likely to take place.
“I look forward to working with FHFA, HUD, Congress, and other stakeholders to address the need for housing finance reform as laid out by President Trump’s Presidential Memorandum,” said Treasury Secretary Mnuchin in a statement. “We support a system that provides for access to lending for hardworking Americans, while also protecting taxpayers from risk. An effective and efficient federal housing finance system will also meaningfully contribute to economic growth.”
The White House explains that the president intends for these reforms to help more Americans realize the goal of homeownership, hoping to improve access to sustainable mortgages, preserve the 30-year fixed-rate mortgage, and enabling citizens to access housing programs to assist in financing the purchase of their first home.
“Sustainable homeownership is the benchmark of success for comprehensive reforms to Government housing programs,” the statement said.