as "residual interests" in a REMIC for domestic building and loan associations and as "real estate assets" for REITs, as described in "Certain Federal Income Tax Consequences" in the Base Offering Circular, but will not be treated as debt for federal income tax purposes. Instead, the Holders of the Residual Securities will be required to report, and will be taxed on, their pro rata shares of the taxable income or loss of the Trust REMIC, and these requirements will continue until there are no Regular Securities of any Class outstanding. Thus, Residual Holders will have taxable income attributable to the Residual Securities even though they will not receive principal or interest distributions with respect to the Residual Securities, which could result in a negative after-tax return for the Residual Holders. Prospective investors are urged to consult their own tax advisors and consider the after-tax effect of ownership of the Residual Securities and the suitability of the Residual Securities to their investment objectives. Prospective Holders of Residual Securities should be aware that, at issuance, based on the expected  prices  of  the  Regular  and  Residual  Securities  and  the  prepayment  assumption described above, the residual interests represented by the Residual Securities will be treated as "noneconomic residual interests" as that term is defined in Treasury regulations. MX Securities For a discussion of certain federal income tax consequences applicable to the MX Classes, see "Certain Federal Income Tax Consequences – Tax Treatment of MX Securities", "– Ex- changes of MX Classes and Regular Classes" and "– Taxation of Foreign Holders of REMIC Securities and MX Securities" in the Base Offering Circular. ERISA MATTERS Ginnie Mae guarantees distributions of principal and interest with respect to the Securities. The Ginnie Mae Guaranty is supported by the full faith and credit of the United States of America. The Regular and MX Securities will qualify as "guaranteed governmental mortgage pool certificates" within the meaning of a Department of Labor regulation, the effect of which is to provide that mortgage loans underlying a "guaranteed governmental mortgage pool certifi- cate"  will  not  be  considered  assets  of  an  employee  benefit  plan  subject  to  the  Employee Retirement Income Security Act of 1974, as amended ("ERISA"), solely by reason of the Plan's purchase and holding of that certificate. Plan investors should consult with their advisors, however, to determine whether the purchase, holding, or resale of a Security could give rise to a transaction that is prohibited or is not otherwise permissible under either ERISA or the Code. See "ERISA Considerations" in the Base Offering Circular. The Residual Securities are not offered to, and may not be transferred to, Plans. LEGAL INVESTMENT CONSIDERATIONS Institutions whose investment activities are subject to legal investment laws and regula- tions or to review by certain regulatory authorities may be subject to restrictions on investment in the Securities. No representation is made about the proper characterization of any Class  for  legal  investment  or  other  purposes,  or  about  the  permissibility  of  the purchase  by  particular  investors  of  any  Class  under  applicable  legal  investment restrictions. S-24