HousingWireHousingWire
It seems the Federal Housing Administration (FHA) — a division of the U.S. Department of Housing and Urban Development (HUD) — won’t be spared from widespread personnel cuts, as had been suggested by prior reporting and statements from a HUD workers’ union official. But it’s still unclear exactly what’s happening.
Reporting by Bloomberg on Tuesday asserted that at least 40% of the staff at FHA will be impacted by a large-scale reduction in force (RIF), while a spokesperson for HUD told CNN today that reports about cuts to FHA were inaccurate.
“Suggestions FHA will cut about half its workforce are not accurate,” the spokesperson told the outlet, but pending layoffs at the agency were neither confirmed nor denied. HousingWire reached out to HUD for clarification but did not receive an immediate reply.
Last week, Bloomberg reported that 50% of HUD’s workforce would be cut, but there seemed to be a carve out for FHA. The FHA, which predates HUD by more than 30 years, provides mortgage insurance for borrowers seeking to enter homeownership who might be challenged in obtaining a conventional loan.
Congress does not appropriate funds to FHA’s Mutual Mortgage Insurance (MMI) Fund. Instead, loans backed by FHA provide receipts for the government, and the financial condition of the fund has been consistently improved by rising home prices in recent years.
According to FHA’s most recent Annual Report to Congress, the MMI Fund’s capital reserve is now five times larger than is statutorily required, signifying 2024 as a positive year of financial performance for FHA’s Title II single-family mortgage programs. A staffer, speaking to Bloomberg, described the agency as “the goose that laid the golden egg.”
The scope of staff cuts and how those are being categorized as either layoffs or firing for performance is not clear. Reporting suggests that recent government hires and probationary employees who have been given positive performance reviews have been fired with “performance” cited as a reason, according to NBC News. Antonio Gaines, president of the American Federation of Government Employees (AFGE) which represents more than 5,000 HUD employees, told Inside Mortgage Finance that probationary FHA employees were terminated late last week.
In an interview with HousingWire shortly after President Trump assumed office, former acting HUD secretary Adrianne Todman explained that HUD is an “intentionally complicated entity” with a lot of interconnectedness between its programs, divisions and staff, given all the ways it has sought to support homeownership across “rural America, urban America, homeownership writ-large across the country,” she said in January.
