While much has been said about the so-called “Department of Government Efficiency” to be led by billionaire Elon Musk and former presidential candidate Vivek Ramaswamy, much of the focus has been levied at programs the new entity will aim to cut.
But programs under the purview of the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) have expenditure levels that conservatives “should love.” This is according to Brian Montgomery, a former deputy HUD secretary and FHA commissioner, in a new op-ed published by The Wall Street Journal.
“HUD supports homeownership through the [FHA] and [Ginnie Mae],” Montgomery wrote. “Except for administrative expenses and IT, taxpayers don’t fund the FHA. Most of HUD’s budget is for subsidized rental housing, not the FHA. The mortgage insurance that the agency offers homebuyers — 80% are first-time purchasers — is funded by borrowers’ premiums paid through their lenders. The agency’s reserves come entirely from borrowers’ premiums and investment income.”
This reality, when combined with the annual surplus that such programs deliver to the U.S. Treasury, helps to signify FHA as a “model of efficiency,” Montgomery said. The annual surplus to be delivered to Treasury in fiscal year 2025 is currently estimated at $6.2 billion, he noted.
Montgomery also cited the recent annual report and actuarial review of FHA’s finances, writing that the “recent annual audit revealed a positive economic value of more than $171 billion.”
Montgomery also defended the financial performance of Ginnie Mae. He took issue with a prior op-ed published in the Journal by Jack Ryan, the co-founder of real estate brokerage REX and a former U.S. Senate candidate from Illinois, which argued that Ginnie Mae had been “bailed out” in the past. Montgomery disputed the characterization.
“As for Ginnie Mae, it guarantees timely payment of principal and interest to private investors,” Montgomery said. “The fees that investors pay Ginnie Mae allows it to make money for the government. It has never been bailed out, as Mr. Ryan contends.”
Montgomery ended by saying that the goals of HUD, FHA and Ginnie Mae are in alignment with what the second Trump administration wants to do in the realm of housing.
“The incoming administration seeks to increase the homeownership availability and affordability while trimming government waste. Ginnie Mae and the FHA are examples of getting that job done through smart management and strong partnerships with the private sector,” he wrote.
Montgomery served in the first Trump administration, first as FHA commissioner and then as HUD deputy secretary. Following the conclusion of the first Trump administration, Montgomery went on to found consultancy Gate House Strategies. Montgomery has also contributed to HousingWire on multiple occasions.
