Speculation is mounting over whether the Federal Housing Administration has been affected by workforce reduction measures implemented across the federal government by President Trump’s Department of Government Efficiency.The Department of Housing of Urban Development denies allegations that 40% of the agency’s workforce is on the chopping block, as claimed by a Bloomberg report Feb. 18.
HUD’s Secretary Scott Turner dubbed the news a “false headline alert” in an X post last week.
However, a source with knowledge of the department says reductions are a possibility and adds that there are “ongoing discussions” internally on the topic.Mortgage industry stakeholders, including those who do consultation for lenders, have reported a blackout of information coming from HUD and the FHA.
Career staffers themselves say they have very limited information about what is happening in their department.
One mortgage industry consultant, who requested anonymity, posits that if layoffs do hit the FHA there should be minimal disruptions. They expressed concern, however, with how FHA’s technology stack may be impacted by reductions.
Specifically, they pointed to FHA Connection, the system used by mortgage lenders to process loans and monitor mortgage insurance.”The big impact for FHA would be contractors being let go that do all their systems work,” they said. “While the systems are working there would be relatively minimal impact on the industry, but if something went wrong there, it could bring things to a grinding halt.”
An internal memo obtained by The Washington Post says there are plans to reduce HUD’s workforce from 8,300 employees to just over 4,000
Some of that restructuring will hit the FHA, the news agency claims, but other agencies including the Office of Public and Indian Housing, the Office of Fair Housing and Equal Opportunity and The Office of Community Planning and Development will also face layoffs.
Ginnie Mae, an agency inside of HUD, has already seen a reduction in its ranks, with about 25% of the government guarantors workforce slashed, according to a former Ginnie Mae executive. Most of the employees were probationary hires.
The government guarantor now has close to 150 employees, which will have to oversee 140 issuers and over $2 trillion in guarantees, the former Ginnie executive added.
The reduction to HUD’s personnel comes after the Trump administration announced it was eying $260 million in cuts to the department. Turner disclosed the launch of a Department of Government Efficiency Task Force, composed of HUD employees, to scrutinize every dollar across the agency, per a press release.
Since the launch of DOGE, the department claims to have recovered $1.9 billion of funds “misplaced by the Biden administration.”
“DOGE and HUD worked together to de-obligate the funds and return them back to the U.S. Treasury,” the department wrote in a press release distributed February 20.
