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Enhancing MBS Disclosure Will Deepen Demand for Ginnie Mae MBS

Since the first Ginnie Mae mortgage-backed security (MBS) was issued more than 50 years ago, Ginnie Mae has maintained a laser-like focus on guaranteeing securities that attract a diverse group of fixed-income investors. The breadth and depth of this investor pool helps keep liquidity flowing to the U.S. government-backed mortgage market. With more than $2.1 trillion of MBS outstanding and investors from five continents holding our securities, the market for Ginnie Mae MBS clearly is deep and liquid. Nevertheless, the agency chose not to rest on its past success and decided to press ahead with program enhancements that could attract more investors and help Ginnie Mae better finance affordable housing for America’s families.

Earlier this month, Ginnie Mae announced that it is implementing a new Environmental, Social, and Governance (ESG) data point in the Single-Family Supplemental File investors use to analyze the agency’s securities. The objective is to give Ginnie Mae MBS investors information that supports their sustainable investing decisions and solutions.

The ESG record will provide pool level aggregate information about the extent of loans and unpaid principal balance (UPB) dollars that are in low- and moderate-income areas.

ESG is growing in importance as a lens through which investors in America and around the world measure investment suitability. By enhancing visibility into the Ginnie Mae pools that contain mortgage loans on homes located in low- and moderate-income areas, Ginnie Mae gives investors another way to gauge the agency’s focus on an aspect of its mission.

The low- and moderate-income areas used in formulating this new disclosure are defined by the Department of Housing and Urban Development (HUD). The new disclosure aggregates to the pool level the number of loans, percent of loans, UPB dollars, and percent UPB dollars across low- and moderate-income areas applicable to the pool.

The new dataset compliments the existing information Ginnie Mae currently provides on the number of first-time homebuyers who are financed with Ginnie Mae MBS. A test file of the enhanced disclosure will be provided in mid-April 2021 and the first production MBS SF PORTFOLIO – POOL SUPPLEMENTAL file containing Record Type 25 will be provided on the Disclosure Data Download page on May 10th.