A top housing official said that 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 last week for an exclusive videoconference interview.
Cassidy said 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.
He led HUD’s Office of Housing, which oversees the FHA’s single-family, multifamily, and healthcare mortgage insurance programs. Realtor.com noted that the FHA supports a $1.9 trillion active insurance portfolio.
The White House report release earlier this year estimated the nation needs 10 million new homes and while the Trump administration has taken aim at regulations Democrats favor, such as environmental rules, it also seeks to curtail restrictions to homebuilding at the local level.
“You can’t regulate your way out of a housing crisis,” Cassidy said in the interview. “You need to build your way out of it.”
Cassidy’s 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, Realtor.com noted.
Improve Lending Environment
But during his time in D.C. Cassidy 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, Realtor.com noted. 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 noted. “So it’s got, you know, over five times the congressional statutory minimum of 2.0 so far has really never been healthier.”
Cassidy 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.”
Realtor.com noted that the housing market continues to see some strain.
It said that 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.
Holdover Effect
Asked if that concerned him, Cassidy said 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,” Cassidy 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.”
Cassidy said he was in a few conversations about key housing ideas that Trump has floated and dropped, such as the 50-year mortgage.
Realtor.com noted that a few in the industry 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.
Cassidy said he believes 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.”
Realtor.com noted that politicians from both sides of the aisle have focused on affordability amid the current housing market. Congress appears ready to pass one of the largest housing measures in decades in the 21st Century Road to Housing Act.
Executive Orders
Meanwhile, the president has preferred pulling levers in the housing market by executive order. Trump 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, Realtor.com noted.
“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.”
