In a new release, Ginnie Mae announced the expansion of its low-to-moderate income (LMI) disclosure initiative to incorporate pool-level data for its Home Equity Conversion Mortgage (HECM) and Home Mortgage-Backed Securities (HMBS) programs. This extension builds on Ginnie Mae’s work to improve its securities filings, which began three years ago.
Ginnie Mae has made advancements in its securities program, such as producing security-level LMI disclosures for the Single-Family program, publishing the Ginnie Mae Social Impact and Sustainability Framework, and updating its prospectus. These disclosures are an integral part of Ginnie Mae’s response to rising investor demand for greater transparency into Ginnie Mae mortgage pools, with a particular emphasis on meeting environmental, social, and governance (ESG) investment criteria.
“As interest in social impact investments continues to grow, Ginnie Mae is finding ways to provide more data on the underlying loans in our securities to help investors make better-informed decisions,” said Sam Valverde, Principal Executive VP of Ginnie Mae. “The disclosures being released today reflect the unique impact of our HMBS program in helping to drive retirement security for lower-income households.”
Ginnie Mae collaborated with government-insuring agencies to deliver monthly pool-level LMI disclosures to borrowers. The additional disclosures include the number of underlying loans provided to LMI borrowers, the proportion of LMI loan count to total loan count, the unpaid principal balance (UPB) of LMI loans in the mortgage-backed securities (MBS), and the percentage of LMI UPB to total MBS UPB.
To achieve this new data disclosure, Ginnie Mae finalized a Memoranda of Understanding (MOU) with FHA and VA in Q1 of 2023. As of April 2023, the nearly 800,000 USDA-RHS loans in their portfolio represented over 7% of Ginnie Mae’s single-family MBS.
LMI households are classed based on the Federal Financial Institutions Examination Council’s Median Family Income Report Tables at the time of loan origination. These disclosures are provided at the aggregate pool level for loans issued by the Federal Housing Administration (FHA) and the United States Department of Veterans Affairs (VA) commencing in 2012. Ginnie Mae ensures it will continue to collaborate with government-insuring agency partners to provide this LMI disclosure across the entirety of its single-family MBS program.
“This is another important step forward in our ESG efforts and serves as a proof of concept for a foundational principle of the growing social investment movement; that, under the right circumstances, financial markets can drive transformational and lasting change for the public good,” said Alanna McCargo, President of Ginnie Mae. “Providing market participants with the tools and data to discern the social impact of their investment decisions supports our overall mission to continue finding new ways to support sustainable and equitable housing opportunities for the communities we were built to serve.”
Valverde will be participating in a Fireside Chat at the 2024 Five Star Government Forum on Tuesday, April 16th, at the National Press Club in Washington, D.C.
Note: New disclosure data will be published on the sixth business day of every month for the prior month’s issuances.
To read the full release for more information, click here.
