As Ginnie Mae’s role in the housing finance system has grown since the 2008 housing crisis, it has generated a significant amount of attention for its support of affordable housing through the Federal Housing Administration (FHA) and Veterans Affairs (VA) mortgage programs. Less known, though, is Ginnie Mae’s role in facilitating affordable mortgage lending in rural parts of the U.S.
Ginnie Mae is an essential and consistent source of mortgage capital in communities all across the country, including approximately 2.1 million outstanding mortgage loans in rural areas at the end of 2019.
While most observers readily connect Ginnie Mae to the FHA and VA mortgage programs, which are very active in rural areas, few are aware of another aspect of Ginnie Mae’s mortgage-backed securities (MBS) program that facilitates homeownership in rural parts of the United States.
Ginnie Mae’s charter enables it to guarantee MBS that are backed by loans guaranteed by the Rural Housing Service, a unit with the U.S. Department of Agriculture (USDA). Mortgages financed through the USDA’s Rural Housing Service support a variety of programs. In the last 10 years, more than 1.3 million of these loans and mortgages on residential homes have been packaged into Ginnie Mae MBS.