Government National Mortgage Association (GNMA); a government-owned corporation overseen by the U.S. Department of Housing and Urban Development, Ginnie Mae pools FHA-insured and VA-guaranteed loans to back securities for private investment; as With Fannie Mae and Freddie Mac, the investment income provides funding that may then be lent to eligible borrowers by lenders.
Ginnie Mae guarantee investors the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans. Mortgage-backed securities (MBS) are pools of mortgages used as collateral for the issuance of securities in the secondary market.
The FHA and VA loans that are backed by Ginnie Mae are popular due to the ease of qualifying and low down payments. These loans are known however, to have rather rigid requirements on the conditions of the secured property.
Ginnie Mae does not actually make loans. Their role is to provide liquidity to the housing market by guaranteeing mortgage loans made by lenders, and then pooling those loans for sale in the secondary market. While GinnieMae may not be as well known as Freddie Mac or Fannie Mae, Ginnie Mae is the driving force behind both FHA and VA mortgage loans, and it was Ginnie Mae that introduced the Mortgage-backed security in 1970 - an action which revolutionized mortgage lending in the US.
The Government National Mortgage Association (GNMA, also known as Ginnie Mae) was created by the United States Federal Government through a 1968 partition of the Federal National Mortgage Association. The GNMA is a wholly owned corporation within the United States' Department of Housing and Urban Development (HUD). Its main purpose is to provide financial assistance to low- to moderate-income homebuyers, by promoting mortgage credit.
Originated by Congress as a government owned company operated by HUD in September 1968, GNMA performs the same functions as Fannie Mae and Freddie Mac in providing money to lenders for mortgages. What makes Ginnie Mae different from Fannie and Freddie, is that GNMA provides money for government loans (FHA and VA).
Often times a loan backed by Ginnie Mae can be constructed so that the borrower can get into a home with zero money down.
Ginnie Mae does not buy or sell mortgages.
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