TABLE OF CONTENTS Page OFFERING CIRCULAR SUPPLEMENT................................................................................................................. 2 DEFINED TERMS...................................................................................................................................................... 2 DESCRIPTION OF THE SECURITIES.................................................................................................................... 5 General ......................................................................................................................................................... 5 Forms of Securities; Book-Entry Procedures ......................................................................................... 5 Minimum Denominations........................................................................................................................... 6 Standard Definitions and Abbreviations for Classes and Components............................................. 6 Distributions ............................................................................................................................................... 6 Method of Distributions............................................................................................................................ 7 Interest Rate Indices .................................................................................................................................. 7 Modification and Exchange....................................................................................................................... 11 THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION.................................................................... 13 GINNIE MAE GUARANTY .................................................................................................................................... 13 THE GINNIE MAE CERTIFICATES ..................................................................................................................... 13 General ......................................................................................................................................................... 13 The VA Loan Program ............................................................................................................................... 15 The FHA Insurance Programs ................................................................................................................. 15 The RHS Loan Program ............................................................................................................................ 16 The HUD Loan Program ............................................................................................................................ 16 UNDERLYING CERTIFICATES ............................................................................................................................. 16 UNDERLYING CALLABLE SECURITIES............................................................................................................. 16 YIELD, MATURITY AND PREPAYMENT CONSIDERATIONS..................................................................... 17 General ......................................................................................................................................................... 17 Payment Delay............................................................................................................................................ 17 Assumability of Government Loans........................................................................................................ 17 Weighted Average Life ............................................................................................................................ 17 Standard Prepayment Assumption Models............................................................................................ 18 THE TRUSTS ............................................................................................................................................................ 19 Certain Policies of the Trusts.................................................................................................................... 19 Amendment ................................................................................................................................................. 19 The Trustee.................................................................................................................................................. 19 Tax Matters Person..................................................................................................................................... 19 Tax Administrator....................................................................................................................................... 19 REMIC Reporting........................................................................................................................................ 19 CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................................................................... 20 General ........................................................................................................................................................ 20 Tax Treatment of Regular Securities........................................................................................................ 21 Tax Treatment of Residual Securities...................................................................................................... 30 REMIC Qualification ................................................................................................................................. 38 Tax Treatment of MX Securities ............................................................................................................. 38 Exchanges of MX Classes and Regular Classes.................................................................................... 39 Taxation of Foreign Holders of REMIC Securities and MX Securities ............................................. 40 Base Offering Circular - Single Family 3 RICHMOND 649290v15