WASHINGTON (7/22/15)--The Federal Home Loan Bank System Tuesday announced an important milestone for its Mortgage Partnership Finance (MPF) Program: the program issued its first security guaranteed by the Government National Mortgage Association (Ginnie Mae).
The $5 million security is backed by mortgages originated by community lenders through the MPF Government MBS product.
Matt Feldman, president of the Federal Home Loan Bank of Chicago, which operates the MPF Program on behalf of nine FHLBs, said in a release, “Ginnies are among the most liquid financial instruments in the world, and this new product allows us to enable FHLBank members to offer competitive FHA, VA, and Government Guaranteed Native American and Rural Housing mortgages.”
“Credit unions are leaders in FHA, VA, and RHS (Rural Housing Service) lending, and access to additional liquidity on affordable terms will allow them to better serve their members,” said Ryan Donovan, CUNA chief advocacy officer. "CUNA applauds this innovative new product from Ginnie Mae and looks forward to watching it expand to FHLBs around the country."
Ginnie Mae President Ted Tozer said, “This agreement is a great example of how the Ginnie Mae MBS (Mortgage-backed securities) program continues to level the playing field by allowing community-based financial institutions to effectively compete with mega banks for homebuyers in their communities.” He added, “Now they can connect directly to the capital markets, improving the home financing options they can offer to their customers without the burden of having to individually obtain and maintain Ginnie Mae approval."