order  to  qualify  for  either  safe  harbor  (the  present  value  or  asset  test),  a  transfer  of  a noneconomic residual interest may not be to a foreign permanent establishment or fixed base of a U.S. taxpayer (an "offshore location"), and each transferee must represent that it will not cause income from the noneconomic residual interest to be attributable to an offshore location of the transferee or another U.S. taxpayer. The final regulations generally apply to transfers of noneconomic residual interests occurring on or after February 4, 2000, although the modifica- tions noted above generally apply to transfers occurring on or after August 19, 2002. Prospective Holders of Residual Securities should consult their tax advisors regarding the final regulations and their application to transfers of Residual Securities. 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 and participations therein underlying a "guaranteed governmen- tal mortgage pool certificate" will not be considered assets of an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or subject to section 4975 of the Code (each, a "Plan"), solely by reason of the Plan's purchase and holding of that certificate. Governmental plans and certain church plans, while not subject to the fiduciary responsi- bility provisions of ERISA or the prohibited transaction provisions of ERISA and the Code, may nevertheless be subject to local, state or other federal laws that are substantially similar to the foregoing provisions of ERISA and the Code. Fiduciaries of any such plans should consult with their counsel before purchasing any of the Securities. 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, a Plan Investor. 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-41