Outgoing Frank Cassidy on running FHA more like a business

Frank Cassidy’s tenure as Federal Housing Administration (FHA) Commissioner and Assistant Secretary for Housing in the U.S. Department of Housing and Urban Development (HUD) was brief but eventful, he told HousingWire.   

Cassidy joined HUD in April 2025 and was confirmed as FHA Commissioner by the Senate in December. He took a leave of absence in April and resigned on Monday to return to his family in Philadelphia and the private sector. Despite the short stint, Cassidy says he hit the ground running to execute the Trump administration’s marching orders: deregulate, streamline, and expand access to mortgage credit.

“I felt like we needed to run the FHA more like a business. Most people don’t know, but the FHA made a $50 billion profit over the last two years,” Cassidy said. 

During his time at the agency, key initiatives included revising the loss mitigation waterfall, opening access to alternative credit reporting, slashing mortgage insurance premiums for multifamily loan programs and a request for information seeking comments on possible improvements to the Home Equity Conversion Mortgage (HECM) and HECM Mortgage-Backed Securities (HMBS) programs.

“The one thing I learned about the government and the FHA is that it’s set up to be like a big cruise ship — it goes straight and slow, and it’s hard to move left, hard to move right,” Cassidy said. “Single-family mortgages have always been the priority, because that makes up 80% to 90% of the FHA’s portfolio.”

Looking ahead, Cassidy remains focused on the housing landscape, expressing excitement for the pending Road to Housing bill and its potential to unlock new supply through manufactured housing deregulation. While acknowledging the challenges of a high-interest-rate environment, he expects the FHA to continue its countercyclical role in providing liquidity to the market.

In this exclusive interview, Cassidy discusses his accomplishments at the agency, his stance on zero-down payment programs, and his plans to continue championing the administration’s housing agenda from the private sector. 

Flávia Nunes: The U.S. Senate confirmed you in December. You took a leave of absence in April and are resigning after two months. Can you elaborate on the timing of the decision?

Frank Cassidy: I was ready to get back to spending time with my family. I have a one-year-old daughter. When the White House called in February, my wife was eight months pregnant, so it was a sacrifice to start working in the administration in D.C. in April and commuting between Philly and D.C. I’d always planned to do a short stint. There’s a saying in government when it comes to private sector people: you want to be in and out and don’t stay too long. I had my initiatives, my goals, and what I wanted to get done, and we were able to hit the ground running on the single-family side.

We tackled revisions to the loss mitigation waterfall. We officially turned the page on COVID. Borrowers had been getting multiple loan modifications — three, four, or five times — and we revised the waterfall guidance to two modifications. That will save billions and billions of dollars for the FHA Single Family Insurance Fund moving forward. I was very excited to tackle that on day one. 

Additionally, opening access to credit reporting was something that I really wanted to push for. There are so many Americans, particularly younger Americans, who have rented an apartment for four years, paid their rent on time, but when they go to pull their credit score, they have no credit, and therefore can’t get a mortgage. By bringing additional competition into the credit space, it will lower costs and expand access to mortgages for millions of Americans who are creditworthy but just couldn’t get a mortgage.

FN: Before joining the department, you originated loans for multifamily properties as senior managing director of FHA Finance at Walker & Dunlop. How did your background help in the FHA role?

FC: Coming from the private sector and the commercial mortgage banking world, I had worked with FHA and HUD my entire career on the multifamily and healthcare sides, but I had never even been in HUD headquarters. I hosted the first-ever single-family executive roundtable, where we brought executives from the top single-family lenders to HUD. Secretary Turner attended, and it was really a listening session to hear what’s working, what isn’t working, and what we should be focused on. I can’t tell you how many executives said, “I’ve been working with FHA for 10 to 15 years”—some of the largest lenders—who had never even been in the building. It was really that private-sector approach that we were able to bring to FHA.

FN: How is the Trump administration changing the strategic direction and operations of the FHA compared to the previous administration?

FC: If you look at the president’s housing executive orders, they talk a lot about expanding access to mortgage credit, bringing more lenders into the mortgage market, and providing more liquidity. Ultimately, if you have more competition and more lenders in the space, it will bring costs to the consumer down. It was all about bringing in liquidity, expanding access to mortgage credit, deregulating, and streamlining a lot of these federal programs.

There’s so much bureaucratic red tape that was put in place over the Biden administration that we’ve now pulled back. Those were the marching orders from the president: expand access to mortgage credit, deregulate, and streamline.

I felt like we needed to run the FHA more like a business. Most people don’t know, but the FHA made a $50 billion profit over the last two years. They call that in D.C. a “negative credit subsidy.” I didn’t even know what that term meant, but essentially, we bring in more money than we cost, and it’s a great public-private partnership that has stood the test of time.

The FHA has been around since 1934, long before HUD even existed. It started to bring liquidity to the mortgage market, and that’s why our housing finance system is the envy of the world. We have 30-year fixed-rate mortgages that a lot of other countries don’t have, and it’s because of that government guarantee in the background. Private lenders still make the loans they originate, underwrite them, and service them, but the FHA, Fannie, and Freddie guarantee those loans against loss to the lenders. That’s why we have so much liquidity in the mortgage market.

FN: How far is the administration in its goal to streamline the FHA? What do you consider your biggest piece of unfinished business?

FC: We’ve got a lot done. There’s obviously still work to do, but I feel like the president has assembled a great team to see a lot of these initiatives happen.

What we did on the multifamily side on day one — we worked to lower the mortgage insurance premium to 25 basis points across the board for all multifamily loan programs. That was huge. Prior to that, under the Biden administration, every multifamily building had to get a green energy certification to get those 25 basis points. What I said was, ‘Every building is going to get the 25 basis points minimum, because the reality of it is, most buildings are being built to those standards anyway.’

Additionally, on our nursing home and assisted living portfolio, we put in place an Express Lane process that took deals that used to take six to nine months to get firm commitments down to seven to 14 days. Overall, the single-family portfolio is in great shape. The capital ratio is above 11.5%. Under my watch, it was the healthiest that it’s ever been. I feel like the FHA is in a great place right now. 

What I am very passionate about is that the average age of a first-time homebuyer right now is up to 40. Back in the day, it used to be in the 20s. As a younger guy myself, I was fortunate to buy my first home at 20 years old. I was a sophomore at St. Joseph’s University here in Philadelphia, and I was looking to move off campus with three college roommates. We looked at a property, and the landlord said, ‘You can either buy it for $200,000 or you could rent it for $1,500 a month.’

I said I’d buy it. I had no idea how I’d finance it, but I discovered the FHA, and I got an FHA loan. I put down 3.5% — $7,000. In 2010, they did a first-time homebuyer tax credit, and I got $8,000 back. My buddies moved in. They paid $500 a month each, and that paid the mortgage of $1,200. I still have that property to this day, and it’s more than doubled in value.

It’s those types of opportunities that we need to expand and educate younger Americans about. We’re becoming a nation of renters, and we need to bring the average age of the first-time homebuyer back down into the 20s.

FN: A recent Urban Institute study suggests that, under certain parameters, a zero-down payment program wouldn’t pose an increased risk to the FHA. Given your inside perspective at the agency, what are your thoughts on zero-down mortgages?

FC: When people buy a home, they should have some skin in the game, whether it be 1%, 3%, 4%, or 5%. Having skin in the game is an important part. I understand there are studies that say it’s not riskier, but I think when somebody saves up, builds that cash reserve, and goes to buy a house, they have a feeling that they have skin in the game, which is what is important. They feel like, ‘I bought this, I did this.’

FN: HUD recently issued a request for information on changes to the HECM and HMBS reverse mortgage programs. What may come out of that?

FC: When I first started in the position, I didn’t really know a lot about reverse mortgages, but I did get coached up quite a bit, and it’s an important program. Seniors sit on $10 trillion of equity in their homes that a reverse mortgage allows them to tap into. And by the way, they don’t have to make any payments when they get the mortgage; the interest just accrues. So, it’s definitely a program that serves a need in the market and is important to seniors. I would like to see efficiencies created in the reverse mortgage space.

FN: How much of a priority is the reverse mortgage space for the agency right now?

FC: Well, you can only get so much done. The government moves slowly. The one thing I learned about the government and the FHA is that it’s set up to be like a big cruise ship — it goes straight and slow, and it’s hard to move left, hard to move right. Now, fortunately, I was able to bring that private-sector spirit to the FHA and get a lot done in the first year, but it’s all about priorities. You have to prioritize initiatives. Single-family mortgages have always been the priority, because that makes up 80% to 90% of the FHA’s portfolio.

FN: As you transition out of the administration, what are your immediate plans in the private sector?

FC: I’m planning on returning to the private sector, to the commercial mortgage banking origination world that I come from. However, I’d like to use my voice to support President Trump and his initiatives as they relate to housing. The Road to Housing bill may pass, and that will be the biggest piece of housing legislation to ever pass. It will affect our kids and our grandkids, and it will happen under President Trump’s watch because of his bold leadership.

I’m really excited about the Road to Housing bill and some of the deregulatory and streamlining initiatives in it. When I was the HUD Assistant Secretary for Housing, in addition to the FHA commissioner, I oversaw HUD’s Office of Manufactured Housing Programs, which oversees the design, build, and installation of manufactured homes. The Road to Housing bill allows for manufactured homes to now be built as two-, three-, and four-story complexes. Right now, manufactured homes are just one story because they have that steel chassis on the first floor. Road to Housing gets rid of that requirement, and it combines a lot of the technology from modular homes to manufactured homes. I feel that will allow for a lot of new supply to come online in an inexpensive manner.

I made a lot of relationships with the senators in D.C., particularly on the Senate Banking and Housing Committee, so I plan to advise them and to use my voice as the former FHA commissioner and Assistant HUD Secretary for Housing to basically champion the president’s housing agenda. 

FN: With interest rates remaining high and ongoing geopolitical tensions, how do you see the macro environment impacting the market in the near term?

FC: We’re in a high-interest rate environment right now. We should put in a new Fed chair. I don’t have a crystal ball, but I do think by the end of the year interest rates will start to tighten, and hopefully, we’ll be in an environment where rates are below 6% or so. I’m excited about that.

The FHA really plays a countercyclical role in the market. When rates are higher and capital is less available, the FHA, as well as Fannie and Freddie, tend to step up. We’re in a good place right now in the market. It’s obviously harder to get deals done in a higher interest rate environment, but that’s part of real estate, and as part of the housing finance system, it very much goes in cycles.

FN: What are your thoughts on Bill Pulte stepping into the role of acting DNI?

FC: Bill is a proven leader who knows how to get results. President Trump trusts him, and he’s done a great job at Fannie and Freddie. He’ll bring that same spirit of getting results to the position of acting DNI director. Bill’s a good friend, and we work very closely together. The president often picks leaders with unconventional backgrounds but who have a proven track record of success. Bill has experience running big bureaucratic organizations — just look at what he’s done at Fannie and Freddie.