Housing industry participants will closely watch President Donald Trump in Davos, where he is expected to outline measures aimed at improving housing affordability. His speech is expected for Wednesday.
Potential initiatives include ideas Trump has already floated on social media, such as encouraging Fannie Mae and Freddie Mac to expand their purchases of mortgage-backed securities (MBS), banning large institutional investors from acquiring single-family homes, and allowing savers to tap 401(k) funds penalty-free for use as a down payment.
Some of these measures are already taking shape. The government-sponsored enterprises (GSEs) have expanded their MBS portfolios, with combined holdings rising by more than $68 billion to approximately $247 billion in the six months ending in November 2025.
Others, however, are likely to face significant legislative hurdles. Proposals involving penalty-free 401(k) withdrawals and restrictions on institutional homebuyers would require congressional action, industry experts say.
In particular, a ban on large investors purchasing single-family homes would likely fall outside the budget reconciliation process, meaning it would need 60 votes in the Senate — a high bar that makes passage unlikely in the near term.
Still, trade groups broadly welcome the administration’s focus on affordability at a time when mortgage rates remain above 6%, while stressing the need for additional detail and complementary policies.
“MBA welcomes the Trump administration’s focus on making homeownership and rental housing more affordable and attainable for more Americans,” said Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), in a statement. “We look forward to learning more about the Administration’s forthcoming proposals and have offered targeted recommendations to reduce housing costs.”
Other proposals
Among those recommendations, MBA continues to advocate for a reduction in Federal Housing Administration (FHA) mortgage insurance premiums — a position also supported by the National Association of Mortgage Brokers (NAMB). NAMB has additionally called for ending FHA’s “life-of-loan” mortgage insurance rule, which would allow borrowers to cancel premiums once their loan balance reaches 78% of the home’s value.
MBA has also urged policymakers to reduce GSE loan-level price adjustments for middle-income borrowers and for rate-and-term refinances, as well as to eliminate the tri-merge credit report requirement for lower-risk GSE-backed loans.
Other proposals include reforming the mortgage loan originator compensation rule, improving construction loan options, providing targeted capital gains tax relief on the sale of a primary residence and expanding condominium and multifamily lending through updated GSE and FHA policies.
Housing downpayments through family support
Meanwhile, the Community Home Lenders of America (CHLA) said it is “fully supportive of President Trump’s reported proposal to allow individuals to withdraw funds from their retirement accounts penalty free for a down payment on a home,” according to executive director Scott Olson.
CHLA has also urged Congress to consider an additional approach aimed at helping first-time buyers through family support. Olson mentioned the group’s proposal to allow parents to defer capital gains taxes — similar to a Starker exchange — when proceeds are gifted to a child or grandchild for a down payment.
Under the proposal, parents could defer or exclude long-term capital gains on the sale of up to $50,000 in stocks, bonds, mutual funds, publicly traded real estate investment trusts (REITs) or taxable gains above the exclusion on the sale of a primary residence. The funds would need to be gifted and used within six months toward a first-time home purchase.
“It makes no sense to have seniors with appreciated stock elect to hold the stock until they die to get the basis step-up and only then pass the assets along to their children and grandchildren,” CHLA wrote. “This proposal allows the same tax outcome now to help their children or grandchildren buy a home.”
Separately, AnnieMac Home Mortgage CEO and President Joseph Panebianco said in a LinkedIn post that Trump could announce additional affordability initiatives in Davos, including incentives for homebuilders focused on multifamily and entry-level single-family homes, regulatory easing by local governments to reduce construction costs and the use of public land to support lower-cost housing development.
He also said that, “if you can cap credit card interest rates at 10%, why not cap insurance premiums on homes too? Homeowners insurance has hurt housing affordability almost as much as interest rates (to say nothing about what it does to delinquency).”
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