Home / Daily Dose / Ginnie Mae Highlights Its ESG Strategy Impact on MBS
Print This Post Print This Post

Ginnie Mae Highlights Its ESG Strategy Impact on MBS

Ginnie Mae has added a new Environmental, Social, and Governance (ESG) webpage to its website, which provides details on the organization’s ESG strategy with a focus on the environmental and social impacts its MBS program offers to investors.

Ginnie Mae has also published its first monthly ESG composite for June 2023. This visual depiction of mortgage-backed securities (MBS) data allows Ginnie Mae to highlight the program’s positive impact and key ESG metrics for investors at a glance.

Ginnie Mae’s MBS program was established 55 years ago with a clear mission to support homeownership and affordable rental opportunities for all Americans, with a special focus on low- and moderate-income and historically underserved communities. The mortgage collateral underlying Ginnie Mae’s MBS program demonstrates the incredible reach and impact the agency has had on households across the United States. In light of the growing market and investor interest in sustainability and social impact investing opportunities, Ginnie Mae has focused on adding transparency and deeper data for investors and the public through its disclosure program.

“An investment in Ginnie Mae Mortgage-Backed Securities is an investment in the housing needs of the communities we and our government insuring agency partners serve,” said Ginnie Mae President Alanna McCargo. “Our new ESG composite outlines a clear composition of the borrowers and renters our program reaches, making the collective impact of government mortgage financing programs very clear at a glance.”

Ginnie Mae's recently reported that its MBS portfolio outstanding grew to $2.422 trillion in June 2023, including $39 billion of total MBS issuance, leading to $18 billion of net growth. Issuance for June was significantly higher than May's total of $34 billion, as well as April's reported $33 billion.

June 2023's new MBS issuance supports the financing of more than 130,000 households, including more than 62,000 first-time homebuyers. Approximately 75% of the June MBS issuance reflects new mortgages that support home purchases, as refinance activity remained low due to higher interest rates.

Ginnie Mae also recently announced the expansion of its low- to moderate-income (LMI) disclosure initiative to include loan-level pool data for U.S. Department of Agriculture, Rural Housing Service (USDA-RHS) loans. This pool level borrower income data will be used in Ginnie Mae's Mortgage-Backed Security Level "LMI Income" disclosure.

Ginnie Mae has been working to enhance its LMI disclosures, beginning with LMI geographic information two years ago, and the addition of LMI income earlier in 2023. These disclosures are key to Ginnie Mae's social and environmental mission, and align with increased environmental, social and governance (ESG) considerations from its MBS investors. As of April 2023, Ginnie Mae reported nearly 800,000 USDA-RHS loans in its portfolio representing more than 7% of Ginnie Mae's single-family MBS.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

Check Also

Federal Reserve Holds Rates Steady Moving Into the New Year

The Federal Reserve’s Federal Open Market Committee again chose that no action is better than changing rates as the economy begins to stabilize.