WASHINGTON (11/10/15)--A new product offering from Ginnie Mae and the Mortgage Partnership Finance (MPF) program is designed to provide flexibility for local lenders, giving credit unions more opportunities in the mortgage market.
The entities announced Monday that Ginnie’s government mortgage-backed security (MBS) product will have a “servicing released” option in addition to the existing “servicing retained” execution.
According to Ginnie Mae, the new option offers more flexibility for community lenders that want to originate and sell their government loans into the secondary market.
“Credit unions are leaders in Federal Housing Administration (FHA), Veterans Affairs (VA), and Rural Housing Service (RHS) lending, and access to additional liquidity on affordable terms will allow them to better serve their members,” said Ryan Donovan, CUNA’s chief advocacy officer. “We welcome and applaud the expansion of the MPF program as a positive development that should help facilitate additional credit union mortgage lending, ensuring that even more Americans will have access to affordable mortgage credit."
Through its government MBS product, the MPF program purchases 30-year and 15-year fixed-rate mortgage loans originated by participating Federal Home Loan Bank (FHLB) members that are insured or guaranteed by the following government agencies: FHA, VA, and Department of Agriculture through its RHS Section 502 loan program.
The MPF program issues securities guaranteed by Ginnie Mae backed by these government mortgages.
Ginnie Mae guarantees more than $1.6 trillion of MBS, and the vast majority of government loans are placed in Ginnie Mae MBS.
Ginnie also announced that the government MBS is now available to lenders in more communities: the FHLB Atlanta, FHLB Boston and FHLB Des Moines have been approved to offer the government MBS product.