A former Federal Housing Administration (FHA) commissioner has proposed a new initiative, dubbed the "Trump Mortgage" program, designed to help young Americans achieve homeownership by securing mortgage rates below prevailing market rates. The proposal, put forth by Frank Cassidy, who previously served as FHA Commissioner and Assistant Secretary for Housing under President Trump, aims to complement the recently introduced Trump Accounts.
Cassidy, who enrolled his daughter Margot in a Trump Account in March 2025, believes the program offers an opportunity for children born between 2025 and 2028 to begin building wealth with an initial $1,000 federal contribution. He suggests the "Trump Mortgage" would be a natural next step, enabling this same generation to realize the dream of homeownership.
The proposed Trump Mortgage program would aim to provide qualified first-time homebuyers with mortgage rates one to one-and-a-half percentage points lower than market rates. Cassidy outlined a potential policy structure involving the Treasury, Fannie Mae, and Freddie Mac purchasing mortgage bonds backed by qualifying first-time homebuyer mortgages. This strategy would aim to facilitate lower financing rates through the secondary bond market.
According to Cassidy, the government would retain these bonds during periods of elevated interest rates and sell them as rates decline. He emphasized that such a program would not constitute free money, as Treasury, Fannie, and Freddie already participate in the mortgage-backed securities market. Any such program would also incorporate defined limits on size, funding costs, prepayment risk, and taxpayer exposure.
Furthermore, the proposal suggests expanding the use of existing tax-exempt mortgage financing, a mechanism employed by state housing finance agencies for decades. Investors often accept lower yields on tax-exempt income, enabling eligible borrowers to benefit from reduced mortgage rates. Cassidy noted that bipartisan legislation proposing an expansion of these programs already exists and could serve as a foundation for a broader first-time homebuyer initiative like the Trump Mortgage.
To illustrate the potential impact, Cassidy cited an example of a young couple purchasing a $350,000 home with a $330,000 mortgage. At a 6.5% interest rate, their monthly principal and interest payment would be approximately $2,086. However, reducing the rate to 5% would lower the payment to about $1,772, saving the family over $300 per month and more than $100,000 over the life of the loan. For families managing the expenses of raising children, such savings could be pivotal in transitioning from renting to homeownership.
Cassidy acknowledged that lower mortgage rates alone would not resolve the nation's housing shortage, stressing the importance of complementary policies that facilitate increased home construction. He drew on his experience at the FHA, where he observed that thoughtful reforms could streamline processes, reduce costs, and expand homeownership access while maintaining responsible lending standards.
Cassidy expressed hope that his daughter's generation will inherit a country where purchasing a first home is an attainable goal. He believes President Trump's Trump Accounts provide a head start on wealth building, and the proposed Trump Mortgage could help fulfill the American Dream by enabling the purchase of a first home.