Pennymac Leader On Policy Shifts To Ease Homeownership Barriers

As housing affordability remains strained, policymakers and industry leaders are weighing how regulation, mortgage markets and tax policy shape access to homeownership.

Isaac Boltansky, head of public policy at Pennymac, fielded questions on the matter from Robb Van Raaphorst, senior vice president at Rational 360.

Boltansky said debate in Washington, D.C., reflects growing urgency around affordability, supply constraints and the federal government’s role in mortgage finance.

Despite uncertainty, he said the Trump administration is prioritizing housing costs.

“It is clear to me, and I think it should be clear to all of us, that this administration is now going to be laser focused, and I would argue they have been for the past few months on affordability,” Boltansky said.

He added that affordability proposals are expected to feature prominently in President Donald Trump’s upcoming State of the Union address — signaling a broader, governmentwide effort to ease costs.

That approach has included administrative steps such as directing Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities (MBS).

Boltansky called the purchases a great first step — noting that replacing the Federal Reserve as a buyer in the secondary market made sense as the Fed allows billions in securities to roll off its balance sheet.

Still, he cautioned that the authority to buy more MBS could run out by late summer absent changes to the preferred stock purchase agreement governing the government-sponsored enterprises (GSEs).

“I continue to think that they want to have this tool going into the midterms,” Boltansky said. “Those are in November, by the way, so there’s going to be enormous pressure to see an increase in additional purchases, in that amount of additional purchases, which can be done if they change the preferred stock purchase agreement.

“So, I spend a lot of time figuring out what they can do administratively that won’t be stopped by the courts or Congress.”

Fed leadership, rate expectations

Mortgage rates obviously remain a central factor in affordability.

Boltansky said a new Federal Reserve chair could influence rate policy over time, though changes would not be immediate.

Kevin Warsh has been nominated for Federal Reserve chair, but he faces a tough confirmation fight amid the Department of Justice’s investigation into outgoing Fed Chair Jerome Powell. 

“Unequivocally, the Fed chair is the most important person in that silo of financial services,” Boltansky said. “I think that there will be a meaningful impact there over time. I think the one cautionary point that I’ve tried to make — internally and to others — is it takes time to turn around a big institution like the Fed. It takes time to build consensus.

“The last vote was 10 to two to keep rates where they are. It takes time to change that consensus. He’s got a lot of other stuff on his to-do list. He wants to change public communication. There’s thought he might alter the dot plot.”

Tax policy, supply constraints

Beyond rates, housing supply remains a structural constraint. Boltansky pointed to tax policy as one contributor.

He noted millions of older homeowners occupy large properties and may hesitate to sell because of capital gains taxes — particularly given the step-up in basis upon inheritance.

That dynamic, he said, limits turnover and tightens supply.

“It’s a big, big deal,” he said. “I don’t have the answer yet whether you should just index all cap gains, or index these cap gains to make it easier for first time homebuyers. I don’t have the answer, but I can point very clearly and say that’s a problem that needs to be addressed.”

Lawmakers are weighing whether to index capital gains thresholds for inflation or otherwise modify the tax code to encourage mobility, though no consensus has emerged.

Manufactured housing has drawn bipartisan support as a lower-cost option. Boltansky said Washington’s political divisions complicate broader reforms.

He also pointed to recent U.S. House action easing requirements for manufactured homes as evidence of progress — adding that support for expanding secondary markets for such loans is growing.

“The bill that passed last night would remove the requirement needing a chassis for the bottom of these properties,” Boltansky said. “That’s just coming to terms with reality of how much better these properties are. That’s something that’s going to change.

“I think that you’re going to see more pressure for Fannie and Freddie come back into those markets and try to build out a securitization market — a secondary market for these loans.”

GSE conservatorship and federal backing

The future of Fannie Mae and Freddie Mac remains intertwined with affordability.

While some in Washington have floated ending their conservatorship and pursuing an initial public offering, Boltansky said the administration retains broad authority to maintain or end that status.

“If President Trump wants the conservatorships and the land, his undeniable power to do so is very clear with the way that the first stock purchase agreement is written,” he said.

He suggested keeping the GSEs in conservatorship may offer the federal government greater flexibility — particularly as affordability remains a political priority.

Limited federal reach on supply

Ultimately, Boltansky acknowledged federal tools alone cannot resolve supply shortages.

“The feds have limited capacity in terms of what they can do,” he said. “Ultimately, a lot of this comes down to land, labor and lumber right on top of local and state municipalities. The one area where I think the government can, over time, be helpful, and something that I’m encouraged by, is I think that we need to start embracing the idea of making it so that federal funds for transportation are contingent to some degree on zoning locally and at the state level.”

He suggested conditioning certain federal transportation funds on zoning reforms could incentivize local governments to loosen restrictions — though such proposals raise concerns about federal overreach.

As Congress prepares for hearings on mortgage finance and affordability, industry leaders are bracing for months of policy debate. Boltansky urged engagement as Washington considers sweeping ideas.

“I think the State of the Union is going to be something that all of us should be watching,” he said.