Last week, Ginnie Mae launched a new set of disclosures that will provide critical information to investors and other market participants about who our program serves. This pool level data set confirms that every single-family Mortgage-Backed Security (MBS) we guaranty has a significant and measurable impact on the lives of many lower-income households who achieve homeownership through government lending.
As a Congressionally chartered corporation whose mission is to promote access to mortgage credit, with a special emphasis on historically underserved communities, Ginnie Mae continuously seeks market-driven strategies to harness investor interest for the public good. MBS investors, in particular those with Environmental, Social, and Governance (ESG) strategies, have made clear that additional collateral data is critical to measuring the social impact of their investments. Ginnie Mae believes that a greater industry focus on the social impact of investment in MBS can drive new liquidity towards supporting the housing needs of historically underserved and lower-income communities. In response to this growing investor interest, Ginnie Mae has worked with its insuring agency partners to launch a new set of disclosures.
To achieve this new data disclosure, Ginnie Mae finalized Memoranda of Understanding (MOU) with the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) in the first quarter of 2023. FHA and VA represent the vast majority of Ginnie Mae collateral, approximately 92 percent of monthly volume and 95 percent of outstanding unpaid principal balance. Ginnie Mae will continue to work with its other insuring agency partners to produce this Low-to-Moderate Income (LMI) disclosure across the entirety of our single-family MBS program.
Investors can now identify the number of underlying loans made to LMI borrowers, the percentage of LMI loan count out of total loan count, the unpaid principal balance (UPB) of LMI loans in the MBS, and the percentage of LMI UPB out of total MBS UPB. The borrower household income and address data, received from the government loan guarantying agencies, is compared against the appropriate Federal Financial Institution’s Examination Council (FFIEC) Area Median Income (AMI) database by loan origination year. If the borrower income is less than 80 percent of its respective AMI income value, in the associated census tract, their mortgage will be flagged as an LMI loan.
It is important to note that the data being published is pool level aggregate data and is only available for the population of active loans originated since 2012. The data will include the prior month’s activity, meaning current month’s originations are excluded. LMI data will not be provided for loans that have undergone a streamlined re-finance, as borrower income data is not collected for this program. In addition, the new data is only provided on the monthly MBS Single-Family Pool Supplemental File, not on Daily or Monthly New Issuance Pool Supplemental Files.
Individual borrower data is not accessible by general data users and is protected in accordance with Ginnie Mae’s security and privacy protocols use and retention. Where appropriate and required, Ginnie Mae applies data obfuscation techniques to personally identifiable information (PII).
The disclosure released last week is part of a multi-year effort to provide greater insight into our collateral for the benefit of investors and the borrowers we, and our insuring agency partners, serve. In April 2021, we began disclosing the number of LMI area loans within Ginnie Mae pools, the percentage of LMI area loans within the pool, the UPB of LMI area loans within the pool, and the percentage of LMI area loans within the pool by UPB. LMI areas, for purposes of this preexisting disclosure, are defined by the U.S. Department of Housing and Urban Development’s (HUD) Office of Policy Development and Research (PD&R). Additionally, in September 2012, we began disclosing First Time Homebuyer status.
The new disclosure data will be published on the sixth business day of every month and made available in the Disclosure Data Download section of the Ginnie Mae website. Ginnie Mae will continue to keep the industry apprised of further developments as data is made available by additional insuring agencies and Ginnie Mae debuts new capabilities.
Further discussion of Ginnie Mae’s commitment to ESG-based investment can be found in this blogpost and in our 2022 Annual Report.