The Government National Mortgage Association, commonly referred to as GNMA or Ginnie Mae, is a corporation that is owned by the federal government and functions within the Department of Housing and Urban Development (HUD). GNMA was established in 1968. It offers a guaranty on the repayment of principal and interest on securities that are supported by mortgages issued by federal agencies, such as the United States Department of Veterans Affairs (VA), Federal Housing Administration (FHA), and Rural Housing Service (RHS). GNMA has historically been profitable and has never needed financial support from general federal funds.

GNMA loans are sold to individual investors or to other financial institutions, who then sell them to individual investors. The owner of the group of loans receives monthly principal and interest payments from the homeowners in the group, or interest payments each month, and the principal upon maturity of the mortgage.

GNMA offers three mortgage-backed security products:

GNMA I mortgage-backed securities: All mortgages within a group must be of the same kind (e.g., single family). The original maturities of at least 90% of the mortgages backing 30-year-pass-throughs must be a minimum of 20 years. All mortgages must be supplied by the same lender and have the same interest rate. The minimum group size is $1 million.

GNMA II mortgage-backed securities: GNMA II allows groups of mortgages that are issued by many different lenders. This diversity enables issuers to assess a range of fees rather than one standard fee. The minimum size for groups with several lenders is $250,000. Single lender groups have a minimum size of $1 million. 

GNMA “REMIC” securities: A REMIC, which is a Real Estate Mortgage Investment Conduit, is not made up of individual mortgages, but of mortgage-backed securities such as GNMA I and GNMA II.

Visit www.ginniemae.gov for an overview of how GNMA operates and to find specific information on GNMA issuers and investors.