A former Federal Housing Administration commissioner is proposing a new federal program he calls the “Trump Mortgage,” aimed at helping first-time homebuyers secure interest rates one to one-and-a-half percentage points below current market levels. The idea was laid out in an opinion piece published by the author, who served as President Donald Trump’s FHA commissioner.
The proposal follows the rollout of Trump Accounts, a federal initiative giving eligible children born between 2025 and 2028 a $1,000 government contribution meant to grow through investment over time. The author recently enrolled his daughter, Margot, born in March of last year, in one of these accounts.
He argues that Trump Accounts should be “just the beginning” of federal efforts to help young Americans build wealth, and that homeownership policy is the natural next step.
A Shrinking Share of First-Time Buyers
The author points to data from the National Association of Realtors showing first-time buyers now make up just 21% of home purchases, the lowest share recorded since the organization began tracking the figure in 1981.
He contrasts that with his own experience: at age 20, he bought his first house for $200,000 using an FHA-insured mortgage with a 3.5% down payment, roughly $7,000, and received an $8,000 first-time homebuyer tax credit. He says that property has since more than doubled in value.
How the Proposed Program Would Work
Under the plan, the Treasury Department, Fannie Mae and Freddie Mac would purchase mortgage bonds backed by qualifying first-time homebuyer loans, allowing those mortgages to be financed at lower rates through the secondary bond market. The author says this approach is similar to one already being used by Treasury Secretary Bessent and FHFA Director Pulte.
The government would hold the bonds while interest rates remain high and sell them once rates fall. The author emphasizes the program would not amount to free money, since Treasury, Fannie Mae and Freddie Mac already buy mortgage-backed securities, and says any program would need clear limits on size, funding costs, prepayment risk and taxpayer exposure.
He also calls for Congress to expand existing tax-exempt mortgage revenue bonds, a tool state housing finance agencies have used for decades, noting that bipartisan legislation to expand these programs has already been proposed in Congress.
What It Could Mean for Buyers
To illustrate the potential savings, the author offers an example: a couple buying a $350,000 home with a $330,000, 30-year mortgage at 6.5% interest would pay roughly $2,086 a month in principal and interest. Lowering that rate to 5% would cut the payment to about $1,772 a month, saving more than $300 monthly and roughly $100,000 over the life of the loan.
The author acknowledges that lower mortgage rates alone would not fix the country’s housing shortage, saying expanded financing access needs to be paired with policies that make it easier to build more homes.
The proposal, as described in the opinion piece, has not been introduced as formal legislation or endorsed by the Trump administration.
