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Ginnie Mae's Multifamily MBS Program: Leading the Way for Tomorrow's Secondary Market
Published Date: 8/6/2012

A Message from Terry Carr, Senior Advisor, Communications & Congressional Relations

By all accounts, Ginnie Mae’s Multifamily Mortgage Backed Securities (MBS) Program has proven to be a marked success. Ginnie Mae has been the fastest growing participant in the multifamily housing market since the housing crisis began in September 2008. Profitable for more than 40 years, 2012 is looking to be the best one yet for the program, as demonstrated by record-breaking volumes and historically low interest rates. In fact, Ginnie Mae surpassed $65 billion in outstanding multifamily MBS in the first quarter (Q1) of 2012, helping to finance 7,116 apartment building loans, 55 hospital loans, and 2,510 nursing home and assisted living loans.

Tailored for a variety of financing scenarios, Ginnie Mae’s Multifamily MBS Program reaches diverse segments across the U.S. rental housing market. The program securitizes construction and permanent loans, project loans, eligible loans from the Federal Housing Administration (FHA) and the U.S. Department of Agriculture’s Rural Development programs, and purchases and refinances. These, in turn, finance properties such as apartment buildings and other rental properties, hospitals, nursing homes, assisted living facilities and other housing options. 

The sophisticated and flexible structure of the program provides Ginnie Mae with a competitive advantage over other multifamily financing offerings in the industry. Ginnie Mae’s Multifamily MBS Program offers the lowest interest rates due to its explicit government guarantee. Also, because of FHA’s standards, Ginnie Mae’s program allows borrowers to securitize loans with a higher loan-to-value ratio. In addition, the program provides seamless construction to permanent loan financing through non-recourse 35-40 year fully amortizing loans, the only program in the industry to do so. And, the program serves as a primary source of financing for health care facilities across the U.S.

Over the years, Ginnie Mae’s Multifamily MBS Program has helped stabilize local economies and bring jobs to communities across the country. For example, even amid the financial crisis, Ginnie Mae’s portfolio included a $756 million multifamily MBS – backed by the largest ever multifamily construction loan – to finance a new medical services facility in Trenton, New Jersey. This project provided approximately 4,800 jobs during the construction phase and, when the project is completed, an estimated 2,200 permanent jobs will have been created in Trenton.

The full faith and credit of the Ginnie Mae guarantee continues to be in high demand. FHA’s pipeline remains robust and the demand for rental units by Americans will likely continue. This demand will keep the fundamentals of Ginnie Mae’s Multifamily MBS strong. As we grow and make enhancements to our Multifamily portfolio, we remain committed to working with FHA and the rest of the industry to ensure that no American is left behind when it comes to affordable housing.

Terry Carr
Senior Advisor, Communications & Congressional Relations