One of the unexpected gifts of this period since my last full-time role — and my foray into entrepreneurship — has been the time to slow down and actually read. Not just scan headlines, but really read: reports, budget notes, trade pieces, and the kind of policy analysis I once only skimmed between client calls. I'm forming fuller, more grounded opinions now than I could when I was working on engagements for someone else's company.
Earlier this fall, as talk of a government shutdown picked up, I found myself running numbers at my kitchen table. Like a lot of people, I was juggling expenses, business costs, and timing. I thought seriously about entering a forbearance on my mortgage — just a temporary pause to catch my breath. But as I read more about the potential for a shutdown, I hesitated. Not because I didn't need the relief, but because I couldn't make the system predictable. I kept imagining the moment the forbearance ended — when I'd need a workout or modification approved by HUD — and wondering if anyone would even be there to process it. That fear was enough to stop me from moving forward.
And then it hit me: why should a homeowner's decision to use an existing relief tool depend on whether the government happens to be open that week?
The Instability Isn't Uniform
Some parts of the system barely flinch during a shutdown; others seize completely. Ginnie Mae, for instance, kept operating through the current funding lapse, ensuring timely payments to investors. HUD's Office of Asset Sales (OAS) has also been designated "essential" — the sales they run move billions of dollars of federally held assets. But that raises a harder question: has this kind of judgment been made appropriately across government? The pattern doesn't seem to correlate with risk or economic consequence. Programs critical to market confidence sometimes pause, while others continue because of technical funding lines. The result is a patchwork of resilience — continuity by accident, not by design.
Where the System Actually Breaks
When HUD's people go home, so does velocity. Endorsements wait, commitments sit unsigned, calendars slide. USDA rural-housing loans can't get new guarantees. And if the National Flood Insurance Program goes dark too, thousands of closings simply stop. Locks expire. Buyers walk. Builders run out of patience and cash. Liquidity may keep flowing, but the pipeline that feeds it shrinks. Confidence erodes. The cost of money creeps upward, basis point by basis point.
Servicers have to keep advancing payments to investors even when borrowers fall behind. But when HUD isn't there to process partial claims or approve workouts, those advances sit on balance sheets longer. For the giants, that's an inconvenience. For smaller issuers — many of them community-based or minority-owned — it's existential.
The classification of "essential" versus "non-essential" is what currently defines resilience in federal programs. It's a bureaucratic label masquerading as strategy.
If Ginnie Mae Can Keep Going, Design the Rest to Match It
Ginnie's continuity isn't luck; it's architecture. Its two-year commitment authority was built precisely so politics couldn't stop the bond market. Ted Tozer, who served as Ginnie Mae President from 2010 to 2017, was instrumental in modernizing the agency's counterparty-risk and capital-adequacy frameworks — giving Ginnie the operational muscle to function autonomously during budget uncertainty. His successors expanded that posture through advanced liquidity modeling, improved master-servicer oversight, and automation in the Ginnie Mae Enterprise Architecture.
Together, they turned a legal authority into a living system that could actually run through a shutdown. That design — a reserve of multi-year commitment authority paired with daily liquidity monitoring and electronic pooling — is why Ginnie can keep sending payments to investors even when much of government pauses. It's resilience by engineering, not luck. The rest of the housing-finance system should be engineered with the same logic.
The Expert Consensus
The Mortgage Bankers Association has urged Congress to "hard-wire" authority for FHA endorsements and USDA guarantees to continue during funding lapses. Former FHA Commissioner Brian Montgomery said "FHA and Ginnie should be treated as essential infrastructure." Former HUD Deputy Secretary Pam Patenaude put it plainly: "We can't keep putting homebuyers and lenders through this every time there's a funding fight."
Servicer Circuit-Breakers and Coordination Playbooks
The concept of "servicer circuit-breakers" comes from experience, not theory. In 2020, during the COVID-19 crisis, Ginnie Mae launched the Pass-Through Assistance Program to keep issuers liquid when borrowers entered widespread forbearance. FHA Commissioner Julia Gordon later said HUD needs similar mechanisms to help servicers keep borrowers in their homes "even when federal approvals slow down."
After the 2018-19 shutdown, several state housing-finance agencies drafted informal guidance to manage delayed closings and expiring rate locks. Pam Patenaude later called for formalizing those guides. One unified inter-agency playbook — clear borrower communication, standardized lock-extension rules, shared data cadence — would keep markets calm instead of nervous.
And after every lapse, there should be a ledger. Former HUD CFO Irving Dennis told National Mortgage News that "no one ever went back and counted what the shutdown cost HUD — in staff hours, rework, or delayed projects." We should count. If taxpayers pay for dysfunction, they deserve the receipt.
What We're Building at HSG
At House Strategies Group, I'm working to build the kind of consulting practice that connects these already-good ideas to execution. There's no shortage of wisdom in housing finance — from Montgomery to Patenaude, Appleton to Gordon — the playbooks are written. What's missing is capacity: disciplined, mission-aware teams that can turn policy insight into operational systems that endure.
Whether it's mapping essential functions that can't go dark, designing continuity frameworks modeled on Ginnie's authority, or crafting inter-agency coordination plans that keep markets talking when Washington can't, our goal is the same: make resilience the rule, not the exception.
The Real Cost
When the CBO estimated that the 2018-19 shutdown permanently erased $3 billion in output, that wasn't abstract. It was the sum of stalled loans, frozen projects, and lost confidence — a tax on everyone who touches the housing system. Each day of paralysis means slightly higher rates, slightly costlier developments, slightly thinner margins, and a few more families who choose caution over relief — as I did.
Resilience isn't administrative housekeeping. It's how we protect the cost of capital — and, in a quieter way, the peace of mind — that underpins the American home.