EXCLUSIVE: Outgoing FHA Director Says Slashing Red Tape Is Key To Solving Housing Crisis, Not More Subsidies

Subsidies alone won't solve the nation's housing shortage, a top housing official says. Instead, America has to build its way out of its housing crisis.

Frank Cassidy, who resigned last week as Federal Housing Administration commissioner, one of the top officials in the U.S. Department of Housing and Urban Development, joined Realtor.com® on Wednesday for a videoconference interview.

He remains a supporter of President Donald Trump's moves to improve affordability in the housing market, but says they also have to be paired with a mandate to build homes at scale.

Cassidy led HUD’s Office of Housing, which oversees the FHA's single-family, multifamily, and healthcare mortgage insurance programs. The FHA supports a $1.9 trillion active insurance portfolio, a lynchpin of the housing finance system.

The White House released a report earlier this year that estimated the nation needs 10 million new homes. While the Trump administration has taken aim at regulations Democrats favor, like environmental rules, it also aims to curtail restrictions to homebuilding at the local level.

"You can't regulate your way out of a housing crisis," Cassidy said. "You need to build your way out of it."

Systemic view

Cassidy, whose career in real estate finance included time at Walker & Dunlop, Newmark, and Oppenheimer & Co. Inc., began serving as FHA director on an interim basis in April 2025, and the Senate confirmed him late last year.

His wife was eight months pregnant when he got the call to join the Trump administration, so Cassidy says he always planned for his stint in Washington to be brief. The Pennsylvania native now plans to return to the private sector.

But during his time in DC, he led several efforts to improve the lending environment and strengthen FHA.

Cassidy said he was proud to have helped strengthen the balance sheet of the Mutual Mortgage Insurance Fund that supports FHA’s single-family mortgage insurance programs. Its capital ratio has grown far above the congressionally mandated 2%.

"The capital ratio is greater than 11.5%. It's the highest it's ever been, and it's got about $100 billion or so of cash and then another $90 billion of future value," Cassidy said. "So it's got, you know, over five times the congressional statutory minimum of 2.0 so far has really never been healthier."

He also said he moved quickly to revise the FHA's loss mitigation waterfall, which is the series of relief options that mortgage servicers must offer to help struggling borrowers avoid foreclosure.

"We gave lenders clear guidance, and put in place the revisions to the loss mitigation waterfall, which essentially allows now for two loan modifications," Cassidy said. "Those changes alone will save the FHA insurance fund billions of dollars in the years ahead. So really proud that we were able to dive in and tackle those changes."

Signs of strain

Still, the housing market continues to see some strain. The Mortgage Bankers Association’s National Delinquency Survey reported an uptick in mortgage delinquencies in the first quarter of this year. VantageScore saw the same trend in late-stage mortgage delinquencies.

Asked if he was concerned, Cassidy noted the holdover effect from interest rates bottoming out during the pandemic. With inflation remaining high, those people don't aim to sell if the 6% mortgage is here to stay.

"Real estate is very up and down, right. It goes in waves," Cassidy said. "So we're in a higher interest rate environment right now. It's obviously much different than the lows of COVID.

"Many homebuyers locked in very low rates during 2020 and 2021. So they're opting not to sell," he said. "They don't want to sell their house, pay off their mortgage, and flip into a mortgage at above 6%. So that's what we're seeing. And, you know, it's good for existing homeowners that we're able to lock in those historically low interest rates."

Which levers to pull

Cassidy was also in a few conversations about key housing ideas that Trump has floated and dropped. At one point, Federal Housing Finance Agency Director Bill Pulte pitched a 50-year mortgage, but backed off the idea.

A few in the industry have also discussed a portable or assumable mortgage that would allow mortgages to travel between homes or new owners, something that would require some major legal changes. But Cassidy thinks that idea is a long ways off in the nation's housing market.

"It significantly affects the attractiveness of the mortgage backed security and in turn can affect the interest rate," Cassidy said. "So it may solve one problem in order to be able to hold your mortgage longer. But the pricing may look much different."

Politicians from both sides of the aisle have focused on affordability amid the current housing market. Congress appears poised to pass one of the largest housing measures in decades in the 21st Century Road to Housing Act.

Trump, meanwhile, has preferred pulling levers in the housing market by executive order. He considered the idea of declaring a national emergency for housing, which could allow the government to invoke the Defense Production Act to push the market. But its strategy is focused on removing regulations, rather than market intervention.

"Ultimately, President Trump and the administration were focused on deregulating and streamlining a lot of these government programs that in some cases hinder the development of new housing," Cassidy said. "We were very focused on supply, right? Building homes, not bureaucracy. The housing crisis is not just a demand problem. It's a red tape problem. So you really can't subsidize your way out of the housing shortage."