Environmental, Social, and Governance

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https://www.ginniemae.gov/about_us/what_we_do/Pages/ESG.aspx

Environmental, Social, and Governance

Ginnie Mae’s guaranty links the United States housing market to the global capital markets, ensuring sustainability, affordability, and liquidity for government housing programs and creating a more equitable housing finance system for all.

In fiscal year 2022, Ginnie Mae has taken several steps to expand disclosure transparency and demonstrate its commitment to ESG. These disclosures highlight the impact of Ginnie Mae’s mission to support more equitable housing for underserved communities as well as incentivizing investor demand by providing transparency into the social impact of the Ginnie Mae MBS program.

In addition, Ginnie Mae provides multi-family “green MBS” data at the pool-level, which identifies properties with “green” features, like energy-efficient windows or water-saving devices, as defined by the Federal Housing Administration.

Environmental Impact

Ginnie Mae approaches Environmental stewardship on two fronts, both of which are aligned with the Biden-Harris Administration’s call to manage and report climate-related financial risks. The first is how we report climate-focused risks, and the second is through Ginnie Mae’s securities disclosure showing how our securities support environmentally positive housing investments that also lower costs for homeowners and renters.

Social Impact

Ginnie Mae has been a social enterprise since its creation in 1968. Ginnie Mae uses its mortgage-backed securities to drive social impact every day by providing consistent and affordable mortgage finance to low-income and traditionally underserved households. These MBS help households build financial security and participate fully in the American Dream. Since the sale of our very first MBS in 1970, Ginnie Mae has been the leader in the fixed-income market, and helped millions of homeowners and renters afford quality housing.

Governance

Ginnie Mae takes a governance-based approach to managing its MBS program. This governance approach includes numerous internal governing bodies that ensure consistent decision making, transparency in enterprise initiatives and risks and forums for ensuring strategic goal achievement. Additionally, Ginnie Mae seeks to ensure that our issuers maintain sound governance practices. To achieve this, Ginnie Mae lays out its expectations of issuer performance, including issuer eligibility requirements, publicly through our Mortgage-Backed Securities Guide. The Guide sets out tailored requirements for different types of issuers based on their respective business models. Ginnie Mae developed an Issuer Stress Test Program in October of 2018 to enhance our counterparty risk monitoring.

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	Analytical capabilities for assessing physical risk impacts to its MBS portfolio;
	Enhanced securities disclosures to provide transparency into its impact on providing equitable housing to underserved markets; and,
	Pooling, issuance, and reporting flexibilities to support FHA, VA, USDA, and PIH program innovations associated with their ESG goals

Read Ginnie Mae's Social Impact and Sustainability Framework here.

Ginnie Mae has developed a composite of ESG metrics viewable here.

Journey Map

Ginnie Mae understands that ESG topics represent both risks and opportunities for the mortgage industry. Addressing ESG priorities is critical in supporting housing opportunities and is aligned with Ginnie Mae’s core values and mission.

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{STEP ONE}ESG Assessment

Ginnie Mae management has developed an initial framework to identify ESG risks and opportunities to the agency, the communities it serves, and the broader housing market. To assist in this effort, Ginnie Mae engaged an outside vendor to identify ESG topics that are likely to have a material impact on the organization’s ability to deliver on its mission and the mortgage industry as a whole.

{STEP TWO}ESG Strategic Roadmap

Ginnie Mae has established an ESG strategy roadmap to prioritize ESG objectives based on their impact to the housing market. The roadmap includes the development of ESG strategic goals, with both near- and medium-term actions engaging all of its program offices in order to understand various stakeholder priorities. The roadmap serves as the guiding principles driving Ginnie Mae’s progress on its ESG journey.

{STEP THREE}Enhance Disclosures

Ginnie Mae has worked with government-insuring agency partners to provide monthly, pool-level LMI disclosures. The new LMI disclosures highlight the count of loans and unpaid principal balance (UPB) made to LMI borrowers, as well as the composition of LMI loans in each pool by count and UPB. Ginnie Mae is exploring different opportunities to improve its ESG disclosure transparency and generate investor interest.

{STEP FOUR}Physical Climate Risk Assessment

Presently, internal Ginnie Mae risk models implicitly capture and address the impact of historical natural disasters on issuers, pooled loans, and non-pooled assets. Ginnie Mae recognizes the backward-looking nature of underwriting tools, such as flood maps, that may no longer be effective predictors of natural disasters. Based on research of regulatory guidance and industry practices on climate risk modeling, Ginnie Mae is developing a framework to incorporate physical risk exposure analysis and forward-looking climate risk modeling into its enterprise risk analysis framework. Collaboration with regulators, industry groups, and ESG specialists will inform the development and implementation of the framework.

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