New Executive Orders Aim to Promote Access to Mortgage Credit and Expand Construction of Affordable Homes

On March 13, 2026, President Donald Trump signed two executive orders aimed at reducing barriers to homeownership. These executive orders follow his commitment in his State of the Union address in February that addressing housing affordability would be a priority for his administration.

The first executive order, “Promoting Access to Mortgage Credit” (the “Mortgage EO”), directs federal financial regulators to ease regulatory burdens on mortgage-lending with a particular focus on expanding the role of community banks and smaller lenders in the mortgage market. 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 mortgage market structure, and significantly reduced bank participation in mortgage-lending. The Mortgage EO was issued alongside a companion executive order, “Removing Regulatory Barriers to Affordable Home Construction” (the “Construction EO”) that targets federal regulations deemed to delay housing development and increase construction costs.

These executive orders come as Congress continues to consider the 21st Century ROAD to Housing Act—a bipartisan housing bill that passed the Senate on March 12, 2026, which includes a ban on large institutional investors purchasing single-family homes. (For more information, please see our Legal Update, US Senate Advances Housing Legislation that Includes a Ban on Institutional Investors Purchasing Single-Family Homes.) Federal banking regulators also are expected to propose new capital rules for mortgage-lending on Thursday, March 19, 2026.

This Legal Update summarizes key provisions of both the Mortgage EO and the Construction EO, as well as identifies what we expect to be next steps.

Key Provisions of the Mortgage EO

The Mortgage EO directs the Consumer Financial Protection Bureau (“CFPB”) and the federal banking regulators—the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration, as well as the Federal Housing Finance Agency (“FHFA”)—to consider various reforms to mortgage-related rules. While many of these directives are aimed at community and smaller banks, other reforms appear intended to holistically address certain consumer-finance-related regulations. As described below, key directives concern mortgage origination and servicing, bank supervisory guidance, capital and liquidity alignment, Federal Home Loan Bank System enhancements, construction and housing supply, and supervisory certainty and enforcement.

Mortgage Origination and Servicing Regulatory Reform

The Mortgage EO instructs the CFPB to consider proposing amendments to Regulation Z that would tailor regulatory requirements for smaller banks. Potential amendments could address Ability-to-Repay (“ATR”) and Qualified Mortgage (“QM”) requirements—including a broader QM safe harbor for portfolio loans and reducing the compliance burden of current ATR and QM underwriting requirements—as well as provisions of the Truth in Lending Act (“TILA”), the Real Estate Settlement Procedures Act (“RESPA”), and the related TILA-RESPA Integrated Disclosure (“TRID”) rules. Additional considerations that apply more broadly include:

• Replacing TRID timing rules with a materiality-based standard that aims to reduce closing delays and be clearer for consumers.
• Exempting small-mortgage loans from caps on QM points and fees.
• Streamlining mortgage-servicing rules for rate-and-term refinancings and exempting such loans from rescission rights.
• Modernizing the right to rescission for mortgage-lending by enabling digital processes.

Bank Supervisory Guidance Reforms

The Mortgage EO calls on bank regulators to consider revising supervisory guidance to ensure that examiners evaluate mortgage-lending based on the effectiveness of lenders’ policies regarding ability-to-repay and prudent underwriting, rather than the current focus on process and technical compliance. The Mortgage EO also directs bank regulators to consider correction-first supervisory treatment for good-faith, technical compliance errors, with enforcement reserved for cases involving borrower harm or repeated misconduct.

Capital and Liquidity Alignment

A central focus of the Mortgage EO is realignment of capital and liquidity rules to remove disincentives for bank mortgage-lending. The Mortgage EO directs bank regulators and the FHFA to consider revising capital regulations to ensure that risk weights for portfolio mortgages, mortgage-servicing rights, and warehouse lines of credit more accurately reflect the material credit risk of these exposures, with appropriately tailored standards for all banks, including community banks. Along these lines, we expect bank regulators to propose new capital requirements for mortgage-lending any day now.

Federal Home Loan Bank System Enhancements

The Mortgage EO contains several provisions focused on the Federal Home Loan Banks. Regulators are directed to consider expanding access to longer-dated Federal Home Loan Bank (“FHLB”) advances tied to residential mortgage assets, modernizing collateral valuation and transfer systems between the Federal Reserve and the FHLBs, and accelerating collateral boarding and valuation processes through standardized data and digital documentation.

The Mortgage EO directs regulators to consider creating targeted FHLB liquidity programs for entry-level housing, owner-occupied purchase loans, and small residential builders, as well as refocusing the FHLBs’ Affordable Housing Program on faster-cycle execution and greater financial leverage for small-scale and owner-occupied housing projects.

In addition, the Mortgage EO directs the FHFA and the Federal Reserve to consider authorizing FHLBs' intermediate access to the Federal Reserve's discount window for their member depository institutions under standardized collateral, operational, and risk-management protocols. Within 120 days of the Mortgage EO, the Director of the FHFA must submit a report to the White House and Director of the Office of Management and Budget on the efficiency of national housing finance markets, including recommendations for regulatory or legislative changes to address any regulatory or oversight gaps.

Construction and Housing Supply

The Mortgage EO directs federal banking regulators and the CFPB to consider revising supervisory guidance in two key respects: first, to exclude one-to-four-family residential development and construction lending from commercial real estate concentration guidance; second, to ensure that supervisory expectations support responsible construction lending by community banks. If implemented, these changes could ease regulatory burdens on community banks active in residential construction finance by removing single-family construction loans from commercial real estate concentration thresholds that currently trigger heightened supervisory scrutiny.

Servicing and Supervisory Certainty/Enforcement

The Mortgage EO broadly directs bank regulators, HUD, and the CFPB to consider aligning supervisory expectations to support portfolio mortgage-servicing as a core community banking function, extend cure-first standards to good-faith servicing errors, simplify loss mitigation requirements, and ensure supervisory evaluations of performing loan portfolios do not focus on technical defects or on evolving supervisory interpretations. Specific to small banks, the Mortgage EO suggests a rule should be proposed to exempt such banks from complex mortgage-servicing requirements.

Regarding enforcement action, federal banking regulators and the CFPB also are encouraged to reserve civil monetary penalties for cases involving willful, knowing, or reckless misconduct, while taking a softer approach to good-faith technical compliance errors and giving financial institutions a reasonable opportunity to self-identify and remediate compliance issues.

Other Mortgage-Related Directives

The Mortgage EO includes several directives targeting reporting under the Home Mortgage Disclosure Act (“HMDA”), appraisal modernization, digital mortgages, and mortgage-licensing for small bank employees. Notably:

• The CFPB is directed to consider raising the asset threshold for exemption from HMDA data collection and reporting requirements for smaller banks, as well as to exclude inquiries from the scope of HMDA, and ensure disclosures made under HMDA protect privacy and reduce technology and other burdens.
• Bank regulators, the CFPB and the FHFA are instructed to consider modernizing appraisal regulations to expand the use of alternative valuation models, desktop appraisals, hybrid appraisals, and artificial intelligence valuation tools, as well as to simplify appraiser qualification requirements and reduce appraisal requirements for low-risk transactions.
• The Mortgage EO directs HUD and the Secretary of the Department of Veterans Affairs (“VA”) to consider aligning their appraisal standards for FHA-insured and VA-guaranteed loans where risk is comparable, clarify the distinction between safety and habitability concerns in an appraisal that require preclosing repair versus cosmetic concerns, and expand post-closing repair flexibility.
• HUD, VA, FHFA and the Secretary of Agriculture (“USDA”) are directed to consider making changes to modernize and promote digital mortgages, including eliminating unnecessary wet-signature requirements and standardizing acceptance of electronic signatures, e-notes, and remote online notarization.
• Bank regulators and the CFPB also are called upon to consider eliminating duplicative licensing or registration requirements for mortgage loan officers of smaller banks.

Key Provisions of the Construction EO

Unlike the Mortgage EO, which contains many directives for federal agencies to consider and a single requirement for the production of a report regarding the efficiency of national housing finance markets, the Construction EO includes a number of directives that will likely result in more immediate revisions to existing guidelines to reduce regulatory barriers to building homes. These include:

• The Construction EO directs the Secretary of the Army to review and revise requirements related to stormwater, wetlands, lakes, rivers, and other bodies of water to reduce housing construction costs, streamline agency decision-making, reduce property tax burdens, and increase insurability, including the Construction General Permit for stormwater discharges, federally issued Total Maximum Daily Loads; requirements related to Municipal Separate Stormwater System permits, federal standards for permits under Section 404 of the Clean Water Act related to waters of the United States, and federal standards for assumption of dredge-and-fill permitting by states and tribes.
• HUD, the Secretary of Commerce, the Secretary of Transportation, and the FHFA are directed to consider eliminating rules and updating programs that impact and constrain residential development and the construction of affordable homes, including: (1) the Economic Development Administration’s guidelines concerning development density; (2) the Department of Transportation’s Reconnecting Communities Pilot Program; (3) HUD’s Pathways to Removing Obstacles to Housing Program; and (4) FHFA guidelines and regulations governing chattel lending for manufactured homes.
• USDA, HUD, FHFA, and the Secretary of Energy are directed to take appropriate action within their authorities, to reform and reduce burdensome or costly energy efficiency, water use, or alternative energy requirements regarding housing, including manufactured housing. That includes reviewing and revising: (1) the Energy Conservation Program’s Energy Conservation Standards for Manufactured Housing; (2) the adoption of energy-efficient standards for new construction of HUD and USDA-financed housing; (3) residential building energy codes subject to review by the Secretary of Energy; and (4) water and energy efficiency standards related to underserved communities and the FHFA.
• The Construction EO focuses on streamlining federal permitting requirements for residential development, including establishing or adopting exclusions under the National Environmental Policy Act to reduce burdens on housing construction, preservation and infrastructure and developing guidance on exempting and reducing burdens on housing construction and infrastructure that facilitates projects under the National Historic Preservation Act.
• HUD and the Secretary of the Treasury must evaluate Administration actions to align programs and incentives with the Opportunity Zone tax incentives to expand investment in housing construction and assess opportunities to coordinate the Opportunity Zone tax incentives with the New Markets Tax Credit to promote single-family home construction in census tracts that are Qualified Opportunity Zones and low-income communities.

Recognizing that housing construction is subject to considerable state and local regulation, the Construction EO requires HUD, within 60 days of the date of the EO, to develop and promulgate regulatory best practices for state and local governments to promote housing construction and affordability. These best practices should include:

• Streamlining permitting processes for housing developments by, for example, capping permit timelines and fees, allowing by-right development for single-family homes, limiting retroactive application of new or amended building codes, allowing builder choice on third-party inspectors, and ensuring quick dispute resolution between agencies and private parties related to construction matters.
• Reduce mandates that increase costs, including green-energy building or other energy-choice requirements and unreasonable building code adoption timelines.
• Review restrictions on manufactured and modular housing based on construction method and emphasize objective standards for building and safety, aesthetic requirements, and prohibitions on construction when comparable site-built housing is permitted.
• Remove limitations on residential housing development beyond urban centers, such as commuter penalties, growth boundaries, and growth moratoria.

The USDA, HUD, the Secretary of Transportation, and the Administrator of the Environmental Protection Agency must take steps to revise their own regulations, guidance, grant applications and requirements to advance these best practices.

Looking Ahead

The Mortgage EO and Construction EO signal the administration will prioritize over the upcoming months regulatory actions to eliminate regulatory burdens on mortgage-lending (particularly for regional and community banks) and reduce costs to encourage the construction of residential housing. While the Mortgage EO directives are framed as considerations for the regulators, and any resulting rule changes will require notice-and-comment rulemaking, we anticipate meaningful regulatory activity in the near term, particularly with the federal banking regulators’ capital proposal on Thursday, March 19 and with the CFPB now requesting funds for its operations. The Construction EO issues specific program and guidance directives to a variety of federal agencies and expects a quick 60-day development of best practices for state and local governments. While it remains to be seen the extent to which states and local governments will adopt these best practices, given the large patchwork of state and local regulations with which builders and developers must comply, such adoption could be slower to implement. Nevertheless, the broad range of regulatory reforms proposed by the executive orders will result in material changes that will impact any participant in the housing industry.

We will continue to monitor developments and provide updates as regulatory proposals emerge.