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Unformatted text preview: N & BACKED LOANS
CHARACTERISTICS OF GINNIE MAE
Type of Institution – Federal government secondary mortgage agency. Former FNMA Functions – GNMA handles special assistance loans (housing programs) and manages liquidation functions that were once part of FNMA. Residential Secondary Market – GNMA is able to purchase, sell, and manage residential mortgages. Mortgage–Backed Securities – GNMA guarantees securities authorized by FNMA when they are backed by FHA, DVA, and the Farmers Home Administration. Special Assistance Functions –GNMA carries out federal subsidy operations for particular types of mortgages (e.g., the “tandem” program, where GNMA buys from private lenders special mortgages which would not otherwise be made, to reduce mortgage payments for HUD's rental subsidy apartment projects). Similar operations have been carried out for homeownership subsidies, and to support the homebuilding industry during recession periods. Lenders wishing to sell such mortgages to GNMA must have a prior commitment and loans and borrowers must be approved under HUD program regulations. Securities – GNMA commits to guarantee, and guarantees securities representing interests in pools of mortgage loans underwritten by the Federal Housing Administration (FHA) and Veterans Administration (DVA), and the Farmers Home Administration. The mortgages in the pools must be similar in type and terms; pools may comprise standard, graduated payment, or growing equity loans, and other types are under consideration. The securities, or “Ginnie Mae” guarantees, are backed by the full faith and credit of the U.S. government. For more information on Ginnie Mae please visit web-site: www.ginnemae.gov FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) / FANNIE MAE
The National Housing Act of 1934 created a forerunner of The Federal National Mortgage Association (FNMA) in order to set up a secondary mortgage market. FNMA
Dynasty School (www.dynastySchool.com) 5-15 REAL ESTATE FINANCE
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- Spring '10