Outgoing FHA Chief: Build More Homes, Cut Red Tape — Subsidies Aren't Enough

Frank Cassidy stepped down last week as commissioner of the Federal Housing Administration, one of the senior-most housing posts in the U.S. Department of Housing and Urban Development. On Wednesday, June 12, he sat for a videoconference interview and delivered a pointed message: America cannot spend or subsidize its way to housing affordability. The only real solution is building more homes.

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

What Cassidy Built — and What He Left Behind

Cassidy came to the FHA from a career that ran through Walker & Dunlop, Newmark, and Oppenheimer & Co. He began serving as FHA director on an interim basis in April 2025 and was confirmed by the Senate late that same year. He was always clear-eyed about his timeline: his wife was eight months pregnant when he got the call from the Trump administration, and he told colleagues from the start that his Washington tenure would be short. He now plans to return to the private sector.

During his time running HUD's Office of Housing — which oversees FHA's single-family, multifamily, and healthcare mortgage insurance programs — Cassidy says he prioritized two things: strengthening the FHA's balance sheet and tightening up the rules that govern what happens when borrowers stop paying.

On the balance sheet front, the numbers are striking. The Mutual Mortgage Insurance Fund, which backstops FHA's single-family programs, now carries a capital ratio above 11.5% — the highest on record, and more than five times the congressionally mandated floor of 2%. Cassidy says the fund holds roughly $100 billion in cash alongside approximately $90 billion in projected future value. That is not a fund in distress. That is a fund with room to maneuver.

He also revised what the FHA calls the loss mitigation waterfall — the structured sequence of relief options that mortgage servicers must offer a borrower before foreclosure proceedings can move forward. The key change: servicers can now offer borrowers two loan modifications instead of one. Cassidy says that adjustment alone will save the insurance fund billions of dollars in future losses.

The Policy Argument: Deregulate Locally, Build at Scale

The bigger theme of Cassidy's exit remarks, reported exclusively by Realtor.com News, is a rebuke of the subsidy-first model for addressing housing shortages. His position aligns with the broader Trump administration approach, which has targeted both federal environmental rules and local zoning restrictions as the core obstacles to new construction.

Earlier this year, the White House released a report estimating the country needs 10 million additional homes. That figure underscores the scale of the gap between what exists and what demand requires. Cassidy's argument is that no amount of down-payment assistance or federal subsidy programs bridges a 10-million-unit shortfall — only construction does.

For sellers, this is a meaningful policy signal. If the federal government succeeds in pushing municipalities to loosen zoning and permitting rules, more homes come to market over the next several years. That is the intended outcome. Whether it materializes at scale — and how fast — depends heavily on local politics, labor supply, and material costs, none of which Washington controls directly.

What This Shift Means If You're Planning to Sell

The near-term picture for sellers remains shaped by inventory scarcity. That scarcity is, in large part, why sellers have held pricing power in most markets despite elevated mortgage rates. The deregulatory push Cassidy describes is a long-game play — zoning reforms take years to move through local governments, and new construction takes additional time after that. Sellers listing in 2026 are not competing against a wave of new supply that doesn't exist yet.

But the direction of policy matters. If the federal framework under the next FHA leadership continues pushing for supply-side expansion — and the fund's financial health gives the agency flexibility to take on more risk or broaden access — buyers have more paths to financing. A healthier, better-capitalized FHA means more first-time and lower-down-payment buyers can get to the table. That is a genuine positive for sellers targeting the entry-level and mid-market segments, where FHA-backed buyers are most active.

The loss mitigation changes Cassidy put in place also reduce systemic risk. Fewer foreclosures entering the pipeline means less distressed inventory hitting markets and undercutting comparable sales. For sellers watching comps, that matters.

Cassidy's broader point — that meaningful affordability requires building millions of homes, not writing more checks — suggests federal housing policy is unlikely to produce any dramatic short-term demand shocks. There are no sweeping new subsidy programs on the horizon that would suddenly expand the buyer pool overnight. What exists is a steady, structural push to lower the cost of building. Sellers should plan around current market conditions, not speculative demand boosts.

If you want to know what your home is worth in today's market before new supply starts reshaping local dynamics, our instant-offer tool can give you a real number with no obligation.