Inside Mortgage Finance: Industry Hopeful About Housing Regulatory Changes

Read “Industry Hopeful About Housing Regulatory Changes” by Shannon Clark

Housing industry experts speaking this week at the Women in Housing and Finance symposium in Washington, DC, appeared optimistic that housing supply could get a boost from recently proposed regulatory changes.

Jung Hyun Choi, principal research associate at the Urban Institute’s Housing Finance Policy Center, highlighted the shortage of housing supply due to the lock-in effect and insufficient new construction. She said this scarcity has driven low home price tiers to appreciate faster than more expensive homes.

Choi noted that currently first-time homebuyers make up about 40% of all homebuyers, and that’s because existing owners aren’t transacting as much as first-time homebuyers.

Erin Quinn, a senior vice president and head of housing public policy at Wells Fargo, said no single measure will get the U.S. out of its housing supply “hole.” However, she said President Trump’s March executive order aimed at expanding access to mortgage credit and the revised Basel III capital requirements could be meaningful.

Ken Wingert, chief advocacy officer at the National Association of Home Builders, believes small homebuilders will help close the supply gap. He said more than half of the new homes that are constructed in any given year are built by small businesses that are building fewer than 10 homes a year.

Additionally, Wingert said the EOs directing the Federal Housing Finance Agency and other federal regulators to increase the flow of acquisition, development and construction lending are important. He said NAHB believes there are ways that the Federal Home Loan Banks and the government-sponsored enterprises can expand acquisition, development and construction lending as well.

Wingert also advocated for a bill in the Senate, the Creating Opportunities for New Skills Training at Rural or Underserved Colleges and Trade Schools Act, which seeks to fund community colleges and vocational schools to expand training in the construction trades.

“We can have all the capital flowing to construction we want, but if we don’t have the workers to actually build said homes, we’re not going to close the supply gap,” he said.

Seth Appleton, president of U.S. Mortgage Insurers, a trade group, highlighted changes in the One Big Beautiful Bill Act. He said one of the most important measures in the legislation is reinstatement of the mortgage insurance premium tax deduction. He said the last time the deduction was available, it saved more than 1.3 million borrowers an average of $2,400 in taxes.

However, he said the deduction remains subject to an adjusted gross income cap that was set in 2007. Thus, increasing the AGI cap would be helpful.

Appleton said recalibrating Fannie Mae’s and Freddie Mac’s enterprise regulatory capital framework could provide additional housing access and affordability without compromising strong risk management controls.

Sarah Brundage, President and CEO of the National Association of Affordable Housing Lenders, said the 21st Century ROAD to Housing Act’s provision to raise the public welfare investment cap from 15% to 20% would help multifamily supply.

She also advocated for the enactment of the bipartisan Neighborhood Homes Investment Act.

She said the legislation would incentivize new production and substantial rehabilitation of affordable, modest homes for owner occupancy. The act was introduced before the House Committee on Ways and Means in April 2025, but no further progress on it has been taken.

“The [Trump] administration has talked a lot about prioritizing supply and prioritizing home ownership,” Brundage said. “They could sign these bills into law before July 4, and we’d all go home a lot happier.”