At the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in San Diego this week, Federal Housing Administration (FHA) Commissioner Julia Gordon addressed the assembled audience of reverse mortgage industry professionals and reflected on her time in the post as the Biden administration winds down.
The event marked Gordon’s third consecutive appearance at a NRMLA Annual Meeting, and it allowed her to add perspective to the wider Biden-Harris administration permutation of the U.S. Department of Housing and Urban Development (HUD)’s housing priorities. Gordon paid specific attention to the events surrounding the Home Equity Conversion Mortgage (HECM) program.
Reflecting on HECM priorities
When asked by NRMLA CEO Peter Bell about the major initiatives and achievements she has been able to oversee during her time as commissioner, Gordon immediately singled out the publication of HUD’s Single Family 4000.1 Handbook, which featured a long-awaited HECM section. This consolidated years’ worth of policy guidance and Mortgagee Letters (MLs) into a single document.
“For us, getting the handbook out was one of my top priorities coming in,” Gordon said. “I witnessed the transformation that occurred in the forward mortgage space after that handbook was first introduced, and I hope this handbook will have a similar impact on consistency, quality and clearing up confusion. It’s essential that everyone is on the same page.”
The full document —which was published nine years after the initial 2014 version of the 4000.1 handbook — consolidates and supersedes Mortgagee Letters in full or in part going back to 1995. It “eliminates more than one hundred individual policy documents associated with the HECM program,” HUD said at the time of its publication in October 2023.
Gordon also talked about tackling liquidity challenges in the reverse mortgage market following the disruptive bankruptcy of a major lender in 2022, lauding the collaboration that HUD and FHA have had with Ginnie Mae to address the resulting challenges.
“We’re also very proud of the work we did about two years ago to support liquidity in this sector when times were tough,” she said. “I’m especially proud of how closely we’ve worked with Ginnie Mae. Coordination across silos has been a hallmark of this administration.”
Reflections beyond HECM
But the HECM program is only one element of a much larger portfolio that HUD oversees. Gordon said she also looks back proudly on reducing the mortgage insurance premium (MIP) for single-family forward mortgages.
“These premiums had been raised significantly after the crisis, and frankly, we were overcharging for the insurance at that point,” Gordon said. “Reducing that cost while maintaining a strong Mutual Mortgage Insurance (MMI) Fund is something I’m very proud of. How many people are reducing prices right now? Almost no one — but we did it.”
Gordon also cited a policy that now allows for the counting of positive, on-time rental payment history when making a lending decision for a first-time homebuyer. She said this is something she hoped for a long time that HUD would do.
“Initially, there was concern about whether we could implement this with our technology, but we found a relatively low-tech solution,” she said. “Already, this change has allowed thousands of people to enter the program who otherwise wouldn’t have been able to.”
Gordon also mentioned updates and expansions to HUD’s 203(k) renovation loan program, along with seeking additional construction and affordability options through manufactured homes and factory-built modular homes.
“Today’s manufactured homes are almost indistinguishable from site-built homes and offer exciting opportunities,” she said. But the U.S. lags behind other nations in off-site construction efforts, she added, something she hopes HUD can impact in the years ahead.
Housing attention is growing
When Bell asked about the increasing prevalence of housing conversations beyond dedicated events, departments and officials, Gordon concurred and added that attention on housing issues seems to have hit a crescendo over the past few years.
“From the beginning of this administration, even before I was in my position, I’ve noticed there has been more interest in and attention to housing than we’ve seen in many administrations, regardless of which party was in the White House,” Gordon said. “That’s been really exciting. I’ll also note that a lot of that interest has actually been driven by the vice president’s office, even before some of the more exciting events occurred in the campaign.”
Kamala Harris was involved in more than one HUD housing policy announcement in recent years, but all of these discussions combine into a reality that Gordon finds encouraging.
“For us, that means we have more opportunities to get our message out on a broader scale,” she said. “When the president gives major speeches where housing is the central topic, or as people saw during the recent campaign debate, where housing was mentioned multiple times across different areas — whether it’s rental or homeownership — it helps spread the message to the public that housing is a vital issue we should all be paying attention to.”