Ginnie Mae Multiclass Programs
The Ginnie Mae Multiclass Securities Program consists of Ginnie Mae REMIC Securities and Ginnie Mae Platinum Securities. The Multiclass Securities Program provides an important adjunct to Ginnie Mae's secondary market activities, allowing the private sector to combine and restructure cash flows from Ginnie Mae MBS into securities that meet unique investor requirements in connection with yield, maturity, and call-option protection. The intent of the Multiclass Securities Program is to increase liquidity in the secondary mortgage market and to attract new sources of capital for federally insured or guaranteed residential loans. Ginnie Mae guarantees the timely payment of principal and interest on Ginnie Mae REMIC and Ginnie Mae Platinum Securities.
Ginnie Mae began its multiclass securities program in 1994 with a REMIC offering collateralized by MBS from the Ginnie Mae I program. In 1995, Ginnie Mae II single-family MBS were structured into a REMIC offering, expanding Ginnie Mae's position in the REMIC market. In 1995, Ginnie Mae began to allow sponsors to use Ginnie Mae II adjustable rate MBS to collateralize a REMIC.
Ginnie Mae introduced a REMIC collateralized by Ginnie Mae Multifamily MBS (MBS backed by FHA insured multifamily or project loans) in 1996. Ginnie Mae Multifamily MBS typically securitize one FHA-insured multifamily loan. The Ginnie Mae Multifamily REMIC securities also enjoy some prepayment protection because the multifamily loans typically have five-year lock-out periods during which the loan may not be prepaid. (See discussion of Ginnie Mae I and Ginnie Mae II Programs.)
Ginnie Mae's presence in the market benefits investors by offering them government-guaranteed mortgage products structured to specific investment needs. It has increased efficiency in the market by attracting a broader range of investors, funneling capital into the nation's housing markets which in turn creates more lower-interest mortgage loans.