By all mortgage-backed securities
settling and trading on the same
depository, economies of scale should
be realized in the form of lower
transaction costs.
Investors of Ginnie Mae serial note
securities will have greater flexibility
in that they will have the option to
either hold the serial note security at
the pool level or break out the pool
into individual serial note units of
$25,000 for repo transactions or
trading purposes.
Targeted Lending Initiative
Ginnie Maes Targeted Lending Initiative
(TLI) was implemented in 1996 to help raise
homeownership levels in central city areas,
including Rural Empowerment Zones and
Rural Enterprise Communities. Since that
time, the Initiative has been expanded to
include Indian lands, new Urban Empower-
ment Zones, and new Urban Enterprise
Communities. Through the TLI, Ginnie Mae
has helped 278,784 families buy homes in
underserved areas. A listing of the targeted
areas and the census tracts may be accessed on
Ginnie Maes web site, at www.ginniemae.gov.
This program provides financial incentives for
lenders to increase loan volumes in tradition-
ally underserved areas. By increasing lender
activity in these targeted areas, Ginnie Mae
provides underserved families and households
with increased opportunities to achieve home-
ownership. In five years of operation (October
1, 1996 - September 30, 2001), the Targeted
Lending Initiative has issued $22.3 billion in
securities, representing 228,512 loans in
10,835 pools.
Under the Initiative, Ginnie Mae reduces its
guaranty fee by up to 50 percent when
approved issuers originate (or purchase)
eligible home mortgage loans in designated
communities and place them in Ginnie Mae
pools. The Ginnie Mae guaranty fee may be
reduced by 1 to 3 basis points on a pool,
depending on the percentage of unpaid prin-
cipal balance of eligible FHA-insured and
VA-guaranteed loans in the pool. Issuers
may combine these newly eligible loans with
other targeted lending single family loans,
other than manufactured housing loans, to
meet the previously established targeted lend-
ing thresholds.
All Ginnie Mae single family issuers may par-
ticipate in the Initiative. Once a Ginnie Mae
issuer has originated or purchased eligible
loans, the issuer merely submits the pool
package through Ginnie Maes GinnieNET
delivery system. Issuers will receive a confir-
mation from Ginnie Mae of their reduced
guarantee fee, as applicable.
Leveraging Cross-cutting Initiatives
Ginnie Maes mission of helping low- and
moderate-income Americans gain access to
home mortgages is just part of HUDs - and
the federal governments - effort to improve
housing and economic development in the
United States. Ginnie Mae is committed to
working with HUD, with other federal enti-
ties, and with other public and private sector
organizations to leverage cross-cutting pro-
grams and objectives in support of better
housing and economic development.
Native American Home Loan Guarantee
Program
HUDs Native American Home Loan
Guarantee program (Section 184), adminis-
tered by the Office of Public and Indian
Housing, provides Native Americans with an
effective vehicle for obtaining mortgage
financing. This program offers a 100 percent
federal loan guarantee to lenders, which
Ginnie Mae supports by providing for the eli-
gibility of Section 184 loans for pooling into
single family Ginnie Mae I and Ginnie Mae II
pools. Section 184 loans must be processed
through GinnieNET and guaranteed by the
Office of Public and Indian Housing.
Section 184 loans offer the mortgage commu-
nity (lenders and issuers) a secure means to
establish solid relationships with underserved
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G i n n i e M a e A n n u a l R e p o r t 2 0 0 1