As Ginnie Mae’s charter outlines and evidenced by its daily work—and the work it has done for the past 55 years—Ginnie Mae exists as a social impact organization. Ginnie Mae takes pride in enabling a more equitable and affordable housing finance market. Our efforts are not limited to supporting homeownership goals for all Americans. They also incorporate initiatives designed to support creating sustainable housing. These initiatives simultaneously benefit the environment and appeal to investors.
Ginnie Mae’s commitment to environmental sustainability deepened several years ago when Ginnie Mae developed its Green Mortgage-Backed Securities (MBS) data. In response to investor demand for Green MBS, Ginnie Mae collaborated with the Federal Housing Administration (FHA) to disclose the Green status of multifamily loans. The Green status identifies properties’ Green features, such as water-saving devices, energy-efficient windows, and more, as defined by FHA.
Ginnie Mae’s Green status disclosure identifies whether properties collateralizing a multifamily pool qualify as Green. By qualifying as a Green property, property owners are eligible for a lower mortgage insurance premium (MIP), known as a Green MIP rate. This program encourages borrowers to make energy-efficient improvements to existing properties and invest in properties already designated as Green, thereby increasing the supply of sustainable housing.
The Green disclosure is broken down into five categories: Green/Affordable, Green/Broadly Affordable, Green/Market, Not Green, and Unknown. Combining environmental and social disclosure elements with multifamily loans provides a more comprehensive look into the security composition. These additional data allow environmentally conscious investors to concentrate funds into securities with higher populations of Green loans, enabling them to support their sustainability goals further.
Since the introduction of the Green status disclosure, Ginnie Mae has achieved several milestones. In 2021, Bloomberg, recognizing this program as “Green,” flagged these multifamily MBS with a Green leaf symbol. In addition, Bloomberg noted Ginnie Mae securities that were both “Broadly Affordable” and “Green” as part of a larger category, “Sustainable,” indicated by a blue lightbulb symbol. Subsequently, in 2023, the Climate Bonds Initiative aggregated Ginnie Mae’s total multifamily Green MBS issuance for the prior year and, based on these data, awarded Ginnie Mae the “Most Green Asset-Backed Securities (ABS) Issuance in 2022.” As of January 2024, 4,866 multifamily loans from Ginnie Mae were considered “Green,” “Affordable,” or “Both.”
Energy-efficient construction makes housing more affordable. A significant and growing number of borrowers with Ginnie Mae-securitized loans have received Leadership in Energy and Environmental Design (LEED) certification through the U.S. Green Building Council. LEED is the most widely recognized international standard for sustainable design and construction. Ginnie Mae identified 2,062 loans in its portfolio with LEED certification. These borrowers not only feel good about living in Green homes, but they also benefit from significantly lower costs for water, energy, and electricity consumption. Some of these homes also have solar panels or other alternative energy sources, providing additional financial and environmental benefits. The following graphics provide a breakdown of these properties, including single-family loans and multifamily loans by state.
Unpaid Balance: $2.15 billion
Total single-family loans: 1,973
Total multifamily loans: 89
Graphic 1. Top 10 States
Texas has the most Ginnie Mae securitized loans with LEED certification.
Graphic 2. Total LEED-Certified Single-Family and Multifamily Loans by State
As part of Ginnie Mae’s work to provide transparency surrounding its environmental, social, and governance (ESG) metrics, Ginnie Mae produces monthly MBS Portfolio composites. These demonstrate the value proposition of Ginnie Mae’s loans. Not only does the U.S. Government back these loans, but they are also ethical and rooted in sustainable infrastructure.
Graphic 3. MBS Portfolio Environmental, Social, and Governance (ESG) Metrics as of March 2024
As demand for environmentally conscious and sustainable impact investing increases, Ginnie Mae will continue to build on its work to provide global investors with information to inform decision making. In the spirit of Earth Day today and every day, Ginnie Mae will continue to work to ensure more environmentally friendly housing options are available to low- and moderate-income homeowners nationwide.