Layla Zulfa
In a candid interview with HousingWire, outgoing Federal Housing Administration (FHA) Commissioner Joe Gormley articulated a strong sense of stability regarding the current mortgage insurance framework for both single-family home loans and reverse mortgages. While preparing to transition his FHA commissioner duties to Matt Jones, who is slated for Senate confirmation, Gormley will continue his leadership role as president of Ginnie Mae. His remarks, made during HUD’s sixth Innovative Housing Showcase on the National Mall, underscored the Trump administration’s "very comfortable" stance with the existing mortgage insurance structure, even as the agency navigates evolving market dynamics and explores potential program enhancements.
Gormley highlighted recent adjustments to the multifamily mortgage insurance premium, noting a 25-basis-point reduction for all multifamily programs implemented in October 2025. However, he emphasized that for single-family mortgages, the FHA’s approach remains steadfast. "We constantly evaluate our capital levels and what it looks like from a market perspective," Gormley stated. "I would say we’re comfortable with what it looks like." This assertion comes at a time when the FHA plays a crucial role in making homeownership accessible to a broad spectrum of borrowers, including those with lower credit scores or limited down payments. The FHA’s mortgage insurance premiums are designed to protect lenders from default risk, thereby enabling broader access to credit.
The sentiment of comfort extended to the reverse mortgage program as well. Gormley specifically addressed the mortgage insurance premium structure for these products, reiterating the administration’s satisfaction. This comes after a significant initiative in October 2025, where the U.S. Department of Housing and Urban Development (HUD), in conjunction with the FHA and Ginnie Mae, issued a request for information (RFI) to solicit public feedback on potential improvements to the Home Equity Conversion Mortgage (HECM) and HECM Mortgage-Backed Securities (HMBS) programs. The RFI aimed to address critical industry concerns, particularly those surrounding mortgage insurance and liquidity constraints.
Addressing Reverse Mortgage Program Enhancements
The RFI process initiated in October 2025 represented a proactive step by HUD to gather insights from industry stakeholders regarding the HECM and HMBS programs. Experts had identified two primary areas requiring attention: the structure of mortgage insurance and the liquidity of the market for these products. Gormley acknowledged the diverse range of proposals put forth to rebalance the allocation of mortgage insurance premiums between upfront and annual payments. He stressed the importance of ensuring the FHA’s Mutual Mortgage Insurance Fund (MMIF) remains adequately protected. "We’ve got to make sure the fund is adequately protected," Gormley explained. "We were looking for ideas, some of which had surfaced before, others which are new, and we continue to evaluate." This ongoing evaluation process reflects a commitment to prudent financial management while exploring avenues for program optimization.
The financial health of the FHA’s MMIF is a critical indicator of the agency’s stability and its capacity to fulfill its mission. As of the end of fiscal year 2025, the MMIF reported a robust capital reserve of $188.9 billion, marking a substantial increase of $16.1 billion from the preceding fiscal year. Notably, over $100 billion of this total comprises readily accessible cash or cash equivalents, underscoring the fund’s strong liquidity position. This financial strength provides a solid foundation for the FHA to continue insuring mortgages and supporting the housing market.
Gormley’s Tenure and the Future of Housing Innovation
Joe Gormley’s leadership journey has been marked by significant roles within the housing finance sector. He was confirmed by the Senate in December 2025 to serve as Ginnie Mae’s 19th president, bringing extensive experience from his previous positions as the agency’s executive vice president and chief operating officer. Prior to his Ginnie Mae presidency, Gormley served as acting FHA commissioner following the departure of Frank Cassidy in April 2026. The White House subsequently nominated Matt Jones to fill the FHA commissioner role permanently, signaling a planned succession.
Gormley’s discussion of housing innovation, occurring against the backdrop of HUD’s Innovative Housing Showcase, provided a glimpse into the future of housing construction and financing. The showcase featured a variety of housing types, including manufactured, 3D-printed, and modular homes. Gormley indicated that Ginnie Mae’s securitization programs are capable of accommodating these emerging technologies, provided that the underlying collateral can secure insurance or guarantees from government agencies like the FHA, the U.S. Department of Veterans Affairs (VA), or the U.S. Department of Agriculture (USDA). He also observed a positive "good investor appetite for manufactured housing," attributing it to certain "convexity" characteristics that appeal to investors.
Navigating Liquidity and Issuer Risk at Ginnie Mae
As president of Ginnie Mae, Gormley’s primary focus remains on operational execution. The agency boasts a long and unblemished record, having issued its first mortgage-backed security in 1970 and never missing a payment to investors. Despite this strong track record, liquidity continues to be an area of active exploration. Ginnie Mae remains committed to "explore different proposals" to enhance market liquidity and ensure the smooth functioning of its securitization programs.
Gormley did acknowledge the presence of "outliers" within Ginnie Mae’s portfolio, specifically referring to issuers that have amassed portfolios with higher-risk characteristics. These characteristics include lower credit scores, elevated debt-to-income (DTI) ratios, and higher loan-to-value (LTV) ratios. Such portfolios can present challenges in terms of financing and marketability, particularly during periods of economic stress. To address this, Ginnie Mae has made significant investments in both systems and human capital to bolster oversight of these entities. Gormley stated, "We are taking, from time to time, administrative action against some of these entities." While these issues have garnered attention, Gormley was careful to qualify that "I would not say it’s endemic to the program," suggesting these are manageable risks rather than systemic flaws.
In a move to further bolster servicing liquidity, Gormley also discussed the acceleration of a loan-level transfer initiative. Ginnie Mae securities are typically backed by pools of numerous individual loans. However, under certain circumstances, such as significant loan delinquencies, a loan may need to be removed from a pool. Gormley explained, "We know that impedes the value of Ginnie Mae servicing. We think by accelerating this project, we’ll improve liquidity of Ginnie Mae mortgage servicing rights, which will be beneficial to our issuers." This initiative aims to provide greater flexibility and financial support to Ginnie Mae issuers.
Addressing FHA Delinquencies and Policy Adjustments
Gormley addressed the recent uptick in delinquencies within the FHA program, attributing it largely to policy changes implemented in the prior year concerning loss-mitigation strategies. "We believe we understand it very well," he stated. "It’s related to the changes that FHA made in its loss-mitigation policies last year. We did see an increase in delinquencies, but they seem to have moderated over the last several months, as we would have expected. But it’s something we continue to keep an eye on."
In response to the elevated delinquency rates, Ginnie Mae made a decision in April to temporarily exclude loans undergoing FHA Trial Payment Plans (TPPs) from issuer delinquency calculations. This measure was implemented to provide issuers with some relief as they navigated the impact of the new policies. The FHA’s single-family loss-mitigation waterfall, updated in 2025, now mandates TPPs as a prerequisite for certain workout options, such as partial claims. Under this revised framework, borrowers experiencing delinquency must first successfully complete a TPP before being considered for a final loss-mitigation solution.
As servicers have increased their efforts to evaluate delinquent FHA loans for assistance under the new waterfall, the volume of loans in TPP status has naturally risen. This increase in TPP participation has, in turn, contributed to higher reported issuer delinquency rates, according to Ginnie Mae. Gormley indicated that the exclusion of TPPs from delinquency calculations will remain in effect "as long as we need to," assuring that any future adjustments to this policy will be communicated transparently and comprehensively to the industry. This approach demonstrates a commitment to both borrower assistance and maintaining the integrity of the FHA’s programs.
