Why is the overall impact of the title insurance waiver limited?

  • The US Federal Housing Finance Agency estimates that waiving lender’s title insurance could save eligible borrowers 500 to 1500 dollars per loan at refinancing closing. Goldman Sachs calculates that this is equivalent to reducing the rate incentive needed to trigger refinancing by approximately 4 to 10 basis points, and would only modestly increase borrowers’ willingness to refinance.
  • Fannie Mae has had a waiver pilot for low-risk refinancing loans since 2024, replacing the relevant requirement with an automated title review for a small fee. Goldman Sachs believes that even if the pilot expands, the waiver may remain limited to low-risk loans; current mortgage rates are high, and the range of affected loans is also very small.
  • Goldman Sachs therefore expects the executive order as a whole to have no significant impact on mortgage rates or prepayments of mortgage-backed securities (MBS), although the specific impact depends on how the housing finance agencies implement it.

How much additional change can appraisal waivers and simplified documentation bring?

  • Government-sponsored enterprises (GSEs) already have appraisal waiver arrangements: approximately 35% to 40% of limited cash-out refinancing loans received waivers in 2026, down from a peak of 67% in 2020. Goldman Sachs believes coverage may expand after the executive order, but the change may be gradual.
  • Existing digital programs can already verify borrowers’ income, assets and employment, reducing paper documentation. Waiving requirements such as income reverification generally does not lower closing costs, but may shorten processing times; Goldman Sachs does not believe the executive order will bring about a fully streamlined refinancing program.

Why does proactively cancelling mortgage insurance have no immediate effect?

  • The pilot requires housing finance agencies to use automated valuations and other data to proactively identify borrowers eligible for mortgage insurance cancellation, but applies only to loans originated after the pilot is established. Goldman Sachs therefore believes it will not immediately affect existing homeownership costs or the MBS market.
  • Fannie Mae and Freddie Mac already allow servicers to notify eligible borrowers that they can cancel insurance. Their historical cancellation rates are similar, leading Goldman Sachs to believe that lenders may not have been proactively contacting borrowers; in the pilot, housing finance agencies may need to provide financial incentives to encourage lenders to issue notifications proactively.

What can lower government direct-loan rates and manufactured housing change?

  • The executive order calls for lower interest rates on single-family housing direct loans from the Department of Agriculture and the Department of Veterans Affairs. The Department of Agriculture’s direct lending volume was only 571 million dollars in fiscal 2026; its single-family housing direct-loan rate has been 5.75% since 1 October 2026, already more than 100 basis points below market rates. Goldman Sachs believes the interest rate is generally not the main limiting factor.
  • Direct loans differ from government-guaranteed loans securitized into GNMA MBS. Another supply-side measure is the establishment of a manufactured housing working group to study standardized permitting and modern manufacturing methods; Goldman Sachs believes this could help gradually ease the housing shortage.
  • Goldman Sachs believes housing finance agencies may bear part of the cost of improving housing affordability.