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Ginnie Mae has announced revisions to its Home Equity Conversion Mortgage (HECM) Mortgage-Backed Securities (HMBS) requirements to allow securitization of multiple participations related to a particular HECM in any one issuance month in APM—23-11. The intention of this enhancement is to reduce liquidity pressures on HMBS Issuers and ensure the HECM program remains viable and able to serve America’s seniors.
Ginnie Mae’s HMBS program offers access to the secondary market for HECM loans. The program provides Issuers the ability to securitize portions of the HECM over time as Issuers fund borrower line of credit draws and program fees. These payments are referred to as “participations” or “tails.” These changes will be available on October 1 and will allow Issuers to securitize multiple participations as soon as they are ready.
“Ginnie Mae’s HMBS program changes will enable Issuers continuous access to capital market sources of funding to securitize HMBS participations throughout the month.” said Ginnie Mae President Alanna McCargo. “Our goal is to improve Issuer liquidity and strengthen this important program for America’s seniors.”
Ginnie Mae reported that its MBS portfolio outstanding grew to $2.458 trillion in August, including $38.1 billion of total MBS issuance, leading to $18 billion of net growth. Issuance for this month was approximately the same as July’s $38 billion, but lower than June’s $39.5 billion.
August’s MBS issuance supported the financing of more than 123,000 households, including 59,000 first-time homebuyers. Approximately 76% of the August MBS issuance reflects new mortgages that support home purchases, as refinance activity remained low due to higher interest rates.
For the 2023 calendar year to date, Ginnie Mae supported the pooling and securitization of over 410,000 first-time homebuyer loans. The August issuance includes $36.9 billion of Ginnie Mae II MBS and $1.2 billion of Ginnie Mae I MBS, including approximately $1.01 billion in loans for multifamily housing.
August also marked the 55th anniversary of Ginnie Mae, as the Honorable Marcia L. Fudge, Secretary of the U.S. Department of Housing and Urban Development (HUD), marked the occasion by discussing the important contributions Ginnie Mae has made to expand access to affordable housing and mortgage lending for historically underserved communities.
“Since its founding, Ginnie Mae has helped make the American Dream of equitable, affordable homeownership and rental opportunities a reality for millions of Americans. It has served as the principal financing arm for government-mortgage loan programs that serve low- and moderate-income households, first-time homebuyers, veterans, rural communities, and Tribes,” said HUD Secretary Fudge. “We recognize the tremendous contributions of Ginnie Mae and commit to continuing to work together to build a more equitable housing finance system that makes access to safe, secure, and fair housing possible for all. This year marks the 55th anniversary of the passage of the Housing and Urban Development Act of 1968, which President Lyndon B. Johnson signed into law in 1968 and marked the creation of the Government National Mortgage Association, or Ginnie Mae, as a government corporation within HUD. The law went into effect shortly after the enactment of the Civil Rights Act of 1968, which included the Fair Housing Act, enshrining the right of all Americans to access fair, affordable housing, and mortgage lending free from discrimination.”
