Ginnie Mae - Government National Mortgage Association

The Government National Mortgage Association, more often called “Ginnie Mae” or GNMA, is an entity of the US government under the Department of Housing and Urban Development (HUD) which provides the guarantee of payment for those invested in mortgage-backed securities through Ginnie Mae lenders, who back mortgages for the underserved.

Ginnie Mae, like some other government organizations, tries to provide an avenue for underserved folk to become homeowners. For instance, Ginnie Mae and the FHA rub shoulders a lot, working together (you know, the Federal Housing Administration, which provides super-low-cost mortgages for qualifying (poor and/or first-time) borrowers. GNMA also works with the VA (Veterans Admin) and the RHA (Rural Housing Admin).

Because this corporation ensures that interest and principal payments will be made (in a timely manner, of course) to investors, mortgage lenders can charge more for Ginnie Mae MBSs as compared to the regular MBSs markets (low risk usually costs more). With more capital flowing into Ginnie Mae, they can give out more mortgages to underserved folk.