Ginnie Mae is the commonly-used nickname of the Government National Mortgage Association, or GNMA. As the name suggests, this entity is owned by the government, more specifically that of the United States. It falls under the Department of Housing and Urban Development.
The main objective of Ginnie Mae is to make housing accessible to citizens. It was fouded in 1968 and focuses on making home ownership possible. It does this by making sure that funds are made available in order for home financing agencies to succeed. By making sure that lenders are given access to good deals on loans, Ginnie Mae is able to make sure that potential borrowers who wish to purchase houses will in turn, be given access to much-needed financing. The objective is not just to make sure that there are funds available in the financing markets, but that conditions make it possible for affordable and reasonable payment schemes to be made available.
In order to accomplish these objectives, Ginnie Mae approves certain mortgage-backed securities, which are then known as Ginnie Maes. These securities have the special feature of being backed by the government. This gives investors a bit more confidence in the reliability of such an investment, even though a certain amount of risk is still present. Ginnie Mae may often be confused with the Fannie Mae, which was established much earlier, as well as the Freddie Mac. However, it is important to note that Ginnie Mae is different because it does not purchase mortgages, and neither does it transact directly with securities. In addition, Fannies and Freddies do not have the same government-backing that Ginnies enjoy.