Ginnie Mae

Ginnie Mae helps make housing affordable for low- and moderate-income households by channeling global capital into the nations housing markets. Specifically, the Ginnie Mae Guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary market. The lenders can then use the proceeds to make new mortgage loans available.

Ginnie Mae does not buy or sell loans or issue mortgage-backed securities (MBS). What Ginnie Mae does is guarantee investors the timely payment of principle and interest on MBS backed by federally insured or guaranteed loans - mainly those insured by FHA or those guaranteed by the Department of Veterans Affairs (VA). Other guarantors or issuers of loans eligible as collateral for Ginnie Mae MBS include the Department of Agriculture's Rural Housing Service (RHS) and Urban Development's Office of Public and Indian Housing (PIH). Ginnie Mae securities are the only MBS to carry the full faith and credit guarantee of the United States government. Even in difficult times an investment in Ginnie Mae is one of the safest an investor can make.

What are Mortgage-Backed Securities?

Mortgage-backed securities (MBS) are pools of mortgages used as collateral for the issuance of securities in the secondary market. MBS are commonly referred to as "pass-through" certificates because the principle and interest of the underlying loans is "passed through" to investors. Ginnie Mae MBS are fully modified pass-through securities guaranteed by the full faith and credit of the United States Government. Regardless of whether the mortgage payment is made, investors in Ginnie Mae MBS will receive full and timely payment of principal as well as interest.