Ginnie Mae

Ginnie Mae

See: Government National Mortgage Association

---

Ginnie Mae

A wholly owned government association that operates the mortgage-backed securities program designed to facilitate the flow of capital into the housing industry. Ginnie Mae-approved private institutions issue mortgage-backed securities with payments that are guaranteed even if borrowers or issuers default on their obligations. Ginnie Mae was created in 1968 when the Federal National Mortgage Association was partitioned into two parts. Formerly called Government National Mortgage Association. See also Ginnie Mae pass through, mobile home certificate.

---

Government National Mortgage Association (Ginnie Mae). The Government National Mortgage Association, known as Ginnie Mae, guarantees mortgage-backed securities issued by approved private institutions and marketed to investors through brokerage firms.

The agency's dual mission is to provide affordable mortgage funding while creating high-quality investment securities that offer safety, liquidity, and an attractive yield.

Ginnie Mae securities are backed by mortgages that are insured by either the Federal Housing Administration (FHA) or the Rural Housing Service (RHS), or guaranteed by the Department of Veterans Affairs (VA).

Ginnie Mae securities are sold in large denominations -- usually $25,000. But you can buy Ginnie Mae mutual funds, which allow you to invest more modest amounts.

Ginnie Mae is an agency of the US Department of Housing and Urban Development (HUD).

---

Ginnie Mae

A corporation formed in 1968 and placed under the control of the Department of Housing and Urban Development (HUD). Ginnie Mae makes no loans, nor does it buy or sell mortgages.Instead,it guarantees pools of federally insured or federally guaranteed loans.It is almost never called by its true name, which is the Government National Mortgage Association (GNMA) (www.ginniemae.gov).

---

Ginnie Mae (Government National Mortgage Association)

What Does Ginnie Mae—Government National Mortgage Association (GNMA) Mean?

A U.S. government corporation within the U.S. Department of Housing and Urban Development (HUD). Ginnie May aims to (1) ensure liquidity for government-insured mortgages, including those insured by the Federal Housing Administration (FHA), the Veterans Administration (VA), and the Rural Housing Administration (RHA) and (2) draw investor capital in the market so that the issuers have the means to issue more. Most of the mortgages securitized as Ginnie Mae mortgage-backed securities (MBSs) are those guaranteed by FHA, which are typically mortgages for first-time home buyers and low-income borrowers.

Investopedia explains Ginnie Mae—Government National Mortgage Association (GNMA)

Ginnie Mae does not issue, sell, or buy pass-through mortgage-backed securities or purchase mortgage loans. It simply guarantees (insures) the timely payment of principal and interest from approved issuers (such as mortgage bankers, savings and loans, and commercial banks) of qualifying loans, such as those issued by the FHA and RHA. Unlike its cousins Freddie Mac, Fannie Mae, and Sallie Mae, Ginnie Mae is not a publicly traded company. An investor in a GNMA security will not know who the underlying issuer of the mortgages is, only that the security is guaranteed by GNMA, which is backed by the full faith and credit of the U.S. government, just like U.S. Treasuries.

Related Terms:
• Fannie Mae—Federal National Mortgage Association (FNMA)
• Freddie Mac—Federal Home Loan Mortgage Corp.
• Mortgage
• Mortgage-Backed Securities—MBSs
• Securitization