what does ginnie mae do 
the government national mortgage association was established in 1968 as part of the u s department of housing and urban development hud to promote affordable homeownership 2 ginnie mae does not create mortgages but guarantees them for single and multifamily homes since the government backs these loans homeowners can secure lower interest rates lowering their borrowing costs using a mortgage calculator is an excellent resource for budgeting these costs ginnie mae operates behind the mortgage market neither issuing selling or buying pass through mortgage backed securities nor purchasing mortgage loans instead approved private lenders originate eligible loans pool them into securities and issue mortgage backed securities guaranteed by ginnie mae in april 2023 ginnie mae s mbs portfolio balance was worth 2 4 trillion 3ginnie mae guarantees mortgage backed securities to help open the home mortgage market to first time homemakers low income borrowers and other underserved groups 2ginnie mae guaranteesginnie mae guarantees the timely payment of principal and interest from approved issuers such as mortgage bankers savings and loans and commercial banks of qualifying loans an investor in a gnma security doesn t know who the underlying issuer of the mortgages is but that the security is guaranteed by ginnie mae and backed by the full faith and credit of the u s government just like the instruments issued by the u s treasury 4the gnma guarantee means that investors with shares in ginnie mae funds never have to worry about the impact of late payments or mortgage defaults on their investment when mortgage borrowers fail to make payments ginnie mae covers them 5ginnie mae s efforts aid those traditionally underserved in the mortgage market most mortgages securitized as ginnie mae mbss are insured by the federal housing administration fha which typically insures mortgages to first time home buyers and low income borrowers 6history of ginnie maeafter the great depression when historically high unemployment rates led to unprecedented loan defaults congress passed the national housing act of 1934 a component of the new deal to help revive the u s housing market and protect lenders from mortgage default in 1968 thirty years after it was established the federal national mortgage association fnma better known as fannie mae split into two entities with two separate functions fannie mae would purchase conventional loans and ginnie mae government backed mortgages 7fannie mae was converted from a government sponsored enterprise gse to a publicly traded company ginnie mae was established as a gse and part of the department of housing and urban development or hud ginnie mae is the only home loan agency explicitly backed by the full faith and credit of the united states government ginnie mae vs fannie mae and freddie macseveral organizations are similar to ginnie mae notably freddie mac and fannie mae freddie mac and fannie mae are government sponsored enterprises gses federally chartered corporations owned by private shareholders 8