In 2025, the United States endured a challenging year in the real estate market. President Trump, in his White House speech on December 17, once again delivered an inspiring message: “In the new year, I will announce the most radical housing reform plan in American history.” Reports from Fox confirmed this statement by White House National Economic Council Director Kevin Hassett, who mentioned that the Cabinet is compiling a series of housing ideas to be announced potentially in the new year.
Despite this, Trump did not provide specific details or a timeline at the time. So, what exactly is Trump’s “most radical housing reform plan”?
Therefore, using clues mentioned by White House officials and regulatory agencies, I will speculate on what this “housing plan” might look like. I will first provide a reasonable and conservative estimation, followed by a more daring idea to predict what groundbreaking plans the Trump administration might unveil.
Let’s analyze the potential plans Trump might introduce and what they could entail. This plan is likely to include multiple reform initiatives, as reliance on a single plan may not be sufficient to shake up the current stagnant market.
Hassett, the White House Council of Economic Advisers Director and a leading candidate for the new Federal Reserve Chair, has recently emphasized the direction to expedite development approvals through administrative and regulatory means and incentivize states that facilitate easier construction of new homes.
Such “radical” policy measures often involve setting hard deadlines for specific federal processes like permits, environmental assessments, and interagency reviews, as well as simplifying documentation and repetitive reviews. Additionally, leveraging federal funds or grants to link subsidies and infrastructure resources with local initiatives to relax zoning constraints, increase density, and expedite permitting could be part of the strategy.
Some common indicators include shorter approval and review times, allowing higher density or varied residential types in zoning, reducing minimum parking requirements, decreasing minimum lot sizes, relaxing height or floor area ratios, and increasing residential construction starts and permit issuances.
States or cities that implement specific reforms may receive bonus points, priority access, or additional quotas for competitive grants or fund allocations.
Trump has previously mentioned the possibility of introducing 50-year mortgages, and the Federal Housing Finance Agency (FHFA) Director Bill Pulte has also publicly discussed researching portable or assumable mortgages. The analysis on 50-year mortgages has been detailed in previous articles for interested readers.
Portable Mortgages involve transferring the existing mortgage to a new property when selling the current residence. This allows homeowners to retain the original interest rate and terms, usually requiring the exchange to be completed within a specified period and requiring reassessment and setting a new mortgage on the new property. This prevents homeowners from losing low-interest rates when changing residences, thus promoting market liquidity.
Assumable Mortgages allow homebuyers to take over the seller’s existing mortgage when purchasing a property, retaining the original interest rate, term, and outstanding balance. The transfer requires lender approval and reevaluation of the buyer’s qualifications. Assumable Mortgages can result in significantly lower monthly payments for buyers, thereby increasing purchasing incentives, although sellers may lose their original low-interest rates.
The narrative within the Trump administration regarding housing has consistently emphasized expanding supply on federal lands. Housing and Urban Development (HUD) Secretary Scott Turner previously mentioned Trump’s proposal during his campaign to establish “Freedom Cities” on federal lands for new cities and housing developments.
In fact, as early as March 17, 2025, the HUD and the Department of Interior jointly announced the formation of the Joint Task Force on Federal Land for Housing, outlining strategies such as assessing underutilized federal lands, selecting suitable sites for residential development, simplifying land transfer or leasing processes, prioritizing affordability, and focusing specifically on rural and tribal communities.
If a significant project is to be launched in the new year, it might involve inventorying developable federal assets (to be transferred or leased to states, localities, or developers) through demonstration projects or competitive bidding to boost large-scale housing supplies, especially in states with high proportions of federal lands in the western regions.
A report from the Congressional Research Service (CRS) indicated that in July 2025, certain housing-related tax measures were enacted, including expanding Low-Income Housing Tax Credits (LIHTC), adjusting mortgage interest deductions, and revising State and Local Tax (SALT) deductions.
The LIHTC is a federal tax tool that offers tax credits to developers for a period, which can be sold to taxpaying investors in return for equity funding to reduce debt and interest costs. This mechanism lowers rent for tenants and ensures long-term affordability.
Opportunity Zones aim to develop properties in economically distressed areas, allowing investors to reinvest capital gains into Qualified Opportunity Funds (QOF) to receive tax benefits like deferrals and reductions, encouraging private equity and development funds to flow into designated areas.
If Trump plans to introduce an even more radical version in the new year, it might involve expanding investment incentives further with measures such as increased LIHTC or extensive implementation of Opportunity Zones, or integrating tax policies, subsidies, and supply-side reforms, such as offering incentives for relaxation of construction regulations at the local level. This could effectively increase supply for specific demographics and areas.
Thus, according to the signals from the White House, the “most radical housing plan” is likely to entail interdepartmental initiatives with a focus on administrative and regulatory improvements simultaneously addressing supply-side and financial components: achieving faster construction, greater affordability, releasing more incentives to developers, and making more land available.
Apart from the more conventional speculations mentioned above, there is a bolder idea that combines short-term transaction support, mid-term supply expansion, and long-term institutional restructuring.
Firstly, immediately reducing effective mortgage rates:
Launching a national, time-limited rate subsidy or buydown for eligible owner-occupant buyers (e.g., first-time buyers or low to moderate-income buyers) with a 2-3% interest rate reduction for 3-5 years (or higher subsidy for the first 2 years with a gradual decrease afterward).
This subsidy would be standardized to ensure that it is used specifically to lower interest rates, making it difficult for banks to convert it into additional fees. It would aim to facilitate favorable terms for buyers and homeowners.
Secondly, expanding nationwide adoption of assumable and portable mortgages:
Permitting homeowners to carry forward existing low-interest mortgages to their new residence under the same borrower, allowing the original mortgage to be transferred to the new property. Furthermore, expanding the “assumable mortgage” scheme to more products and streamlining standardized processes to expedite transactions.
Although the U.S. already has an assumable mortgage system in government-backed loan programs with limited scope, portable mortgages are generally not part of existing systems. Therefore, widespread implementation of these mortgage types could significantly enhance market liquidity.
Thirdly, directly federalizing a portion of local zoning:
Using funding and regulations to facilitate supply. Establishing a “Federal Housing Hotline”: States or cities that meet specific “hard requirements” would receive substantial infrastructure, transportation, school, welfare, and other linked funds.
Hard requirements could include allowing multiple residential units in designated areas without individual hearings within a specified radius of transportation corridors or employment centers. Setting approval deadlines (e.g., automatic approval after 90-120 days if overdue). Legalizing Accessory Dwelling Units (ADUs), duplexes, and fourplexes in existing residential areas. Implementing a standard “pre-approval universal gallery” to streamline design review.
In essence, regulations would be defined in advance to cover elements like building height, setbacks, parking spaces, density, green areas, and facades. When developers submit plans, if they meet all criteria, the government would conduct only technical reviews (e.g., fire safety, structure, plumbing) without requiring additional administrative procedures or case-by-case votes. This approach would accelerate development, offer predictability, reduce time and inflated costs, and minimize construction risks.
Lastly, introducing a “quick-win” tool for immediate impact:
Encouraging the conversion of vacant office and commercial spaces into residential units, using federal tax deductions and low-interest financing to facilitate renovations. Standardized specifications would streamline design reviews. This initiative would particularly benefit high vacancy areas in core city markets but may not be universally applicable nationwide.
These are the potential tools that could be deployed to revive the housing market. We eagerly await to see how Trump’s forthcoming initiatives align with these possibilities or if he has unexpected strategies up his sleeve. Regardless, we are eagerly anticipating the developments.