For Homeowners, ‘Historically Affordable’ MBS Remain Source of Capital

Ginnie Mae on Tuesday announced that mortgage-backed securities (MBS) remain "historically affordable." The corporation's MBS program remains a continually "strong source of capital for America's homeowners," it said.

Ginnie Mae, the wholly-owned government corporation that "attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country," it said, reported via press release that its MBS issuance volume was $76.92 billion in February, down from the record $82.6 billion issued in January.

According to Ginnie Mae, issuance is fueled by across-the-board demand for government-backed mortgages as consumers increase home refinance and home purchase volume during this period of historically low interest rates.

The Department of Housing and Urban Development (HUD) has said that "the full faith and credit guarantee of the U.S. Government that Ginnie Mae places on mortgage-backed securities lowers the cost of, and maintains the supply of, mortgage financing for government-backed loans."

Approximately 274,787 homes and apartment units were financed by Ginnie Mae guaranteed MBS in February.

“Traditional 30-year mortgage rates have increased in recent weeks, but remain historically affordable,” said Ginnie Mae Acting EVP, Michael Drayne. “Low mortgage rates combined with strong consumer demand for the mortgage programs of our federal insuring and guaranteeing partners continue to drive home purchase and mortgage refinancing, and fuel MBS issuance and investment.”

A breakdown of February issuance of $76.92 billion includes $72.21 billion of Ginnie Mae II MBS and $4.71 billion of Ginnie Mae I MBS, which includes $4.61 billion of loans for multifamily housing.

Ginnie Mae's total outstanding principal balance as of February 28 was $2.11 trillion, flat with $2.11 trillion in January, and down slightly from the February 2020 level of $2.14 trillion.

The following explains the two types of Ginne Mae MBS:

• Ginnie Mae I MBS are modified pass-through mortgage-backed securities for which registered holders receive separate principal and interest payments on each of their certificates. Ginnie Mae I securities can include single-family, multifamily, manufactured home, and project construction loans.
• Ginnie Mae II MBS are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent. An Issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-Issuer pools or through participation in the issuance of multiple-Issuer pools, which combine loans with similar characteristics.
  For more information on monthly MBS issuance, UPB balance, REMIC monthly issuance and global market analysis visit Ginnie Mae Disclosure.