Today, Ginnie Mae issued All Participants Memorandum 20-03 (APM 20-03), which announces the expansion of its Issuer assistance programs in response to the National Emergency declared by the by the President of the United States on March 13, 2020, in connection with COVID-19 National Emergency.
The APM introduces a new version of the existing Pass-Through Assistance Program (PTAP) for use by issuers facing a temporary liquidity shortfall directly attributable to the COVID-19 National Emergency. The existing PTAP program had been tailored to natural disaster situations with more limited impact. The application of PTAP to the COVID-19 National Emergency (PTAP/C19) allows Issuers to apply for assistance in meeting their contractual obligation to make timely and in full principal and interest payments due Mortgage-Backed Security (MBS) holders without being held in default under the Ginnie Mae Guaranty Agreement. This assistance is intended to minimize disruptions in the mortgage servicing and MBS capital markets as borrower forbearance and loss mitigation programs are implemented to provide relief to homeowners affected by the COVID-19 National Emergency.
Funds advanced by Ginnie Mae will bear a fixed rate of interest. The rate that will apply to a given month’s pass-through assistance to all Issuers will be posted on Ginnie Mae’s website on the second business day of each month.
“This is an extraordinary and last resort option for Issuers in these unprecedented times, that will enable them to continue to serve homeowners and renters in America who rely on the government mortgage programs financed by Ginnie Mae,” said Ginnie Mae Principal Executive Vice President Seth Appleton. “As important, this program underscores Ginnie Mae’s commitment to ensure timely payment of scheduled principal and interest to investors holding our MBS in all market conditions.”
About Ginnie Mae
Ginnie Mae is a wholly owned government corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie Mae mortgage-backed securities programs directly support housing finance programs administered by the Federal Housing
Administration, the Department of Veterans Affairs, the Department of Housing and Urban Development's Office of Public and Indian Housing, and the Department of Agriculture Rural Housing Service. Ginnie Mae is the only MBS to carry the explicit full faith and credit of the United States government.
Ginnie Mae I MBS are modified pass-through mortgage-backed securities on which registered holders receive separate principal and interest payments on each of their certificates. Ginnie Mae I securities can include single family, multifamily, manufactured home and project construction loans.
Ginnie Mae II MBS are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent. An Issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-Issuer pools or through participation in the issuance of multiple-Issuer pools, which combine loans with similar characteristics.