The head of the Federal Housing Administration announced Monday that she’s leaving her post toward the end of the year to return home to California, where she will teach at the University of California, Berkeley starting in January.
FHA Commissioner Carol Galante joined the Department of Housing and Urban Development more than five years ago as a deputy assistant secretary for multi-family housing programs before she was confirmed to lead HUD’s FHA in December 2012.
Galante took the FHA post as the agency was struggling to beef up its cash reserves. In the wake of the housing bust, the agency had propped up the housing market by insuring qualified lenders against losses. But its default rate shot up as its loan volume expanded, depleting its reserves to levels below what is required by law. In September, FHA tapped taxpayer money to cover its losses for the first time in its history. The White House has since projecteted that FHA would not need taxpayer help in fiscal 2015.
Galante’s departure comes just as HUD Secretary Julian Castro is gearing up at his new post.
In her goodbye memo to staff, Galante said Biniam Gebre, general deputy assistant secretary for housing, will take over as acting FHA commissioner once she’s gone. She also discussed her tenure at FHA and her plans in California, where she was once chief executive of Bridge Housing Corp., a nonprofit developer of affordable, mixed-income and mixed-use developments in the state.
Here is the full memo:
After serving alongside you for over 5 years and after careful consideration, I have decided to leave HUD and my role as the Assistant Secretary Housing /FHA Commissioner toward the end of this year. In January, I will assume the I. Don Terner Distinguished Professorship in Affordable Housing at the University of California, Berkeley, where I will also serve as the Director of the Berkeley Program in Housing and Urban Policy and co-chair the Fisher Center on Real Estate Policy Advisory Board. This is a compelling opportunity for me to continue with work I am passionate about and also return home to California.
While I am excited about California weather and tossing out my ice scraper, I will miss working with all of you to continue the important work we have been doing over the past several years. When I started as the Deputy Assistant Secretary for Multifamily Housing we were still recovering from the economic crisis and the market was far from stable. Now because of your efforts, we have helped our housing market come back. Homeowners’ equity is now over $10 trillion, foreclosure starts are at their lowest levels since 2005, and American families are on pace to purchase over 5 million homes this year alone. Every area of the Office of Housing stepped up to the challenges of meeting the extraordinary needs during this critical time.
I stepped into the role of Assistant Secretary of Housing and FHA Commissioner just as the toll the legacy portfolio was taking on the MMI Fund became apparent. By working hard to establish the right pricing, increase recoveries on distressed assets and better manage risk, we have turned the corner on those losses and significantly improved the financial health of the Fund.
There are so many other ways in which, we have a much stronger Office of Housing. With the Risk Office, we have implemented a holistic approach to risk assessment for every business line. We have stabilized the HECM Program and partnered with Public and Indian Housing (PIH) to find ways to invest in public and affordable housing. We managed a fivefold increase in multifamily and healthcare work and we have begun the process of clarifying FHA policy so lenders have clear, consistent guidelines to follow. I could go on and on, but it is not necessary as you know better than anyone what has been done.
The point I want to make is how very proud I am of what we have accomplished and what a privilege it has been to be part of your team. Any success I’ve had has only been because of your efforts, your commitment and your ability to go above and beyond for the millions of families that depend on the work that we do.
I will miss the enthusiasm and commitment of this amazing housing team. And though I am leaving, I am confident that Biniam Gebre, General Deputy Assistant Secretary for Housing, will provide the leadership and continuity needed to continue progressing toward our shared goals. In fact, it is because of the strong leadership team in both the field and headquarters that I can leave at this time with great confidence, knowing our work will continue unabated.
However, now is not quite yet time for goodbyes! Over the next few months as we transition, I will be relentless in focusing on our most recent initiative the “Blueprint for Access” and other high priorities such as the Rental Assistance Demonstration Program.
I remain passionate about the work we do to make housing more available and affordable for American families and assist communities to thrive. It is why I joined HUD and why having the opportunity to work with you has been so rewarding. Thank you for making the past five years so successful and inspiring.