The Government National Mortgage Association, more commonly known as Ginnie Mae, makes affordable housing accessible to millions of low- to moderate-income individuals and families. It is a government-owned corporation that guarantees the principal and interest payments on securities backed by federally insured or guaranteed mortgages.
Ginnie Mae doesn’t offer direct loans to homebuyers, but it allows mortgage lenders to obtain a better price for guaranteed and insured mortgage loans on the secondary mortgage market. This means more savings and flexible credit requirements are passed on to you, the buyer.
Ginnie Mae guarantees payments on securities backed by certain government-insured or guaranteed mortgages.
Jump to insightThese government-backed loans include Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans, among others.
Jump to insightGinnie Mae is owned by the U.S. government, whereas Fannie Mae and Freddie Mac are sponsored by the government.
Jump to insightWhat does Ginnie Mae do?
Ginnie Mae isn’t a lender — it doesn’t originate or purchase mortgages. Instead, it guarantees that investors in certain mortgage-backed securities (MBSs) will receive a portion of the payments that borrowers make on their government-backed mortgages. This guarantee makes MBSs with federally insured loans more attractive to investors.
Kevin Leibowitz, founder of Grayton Mortgage, said that mortgages backed by government entities like the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) are pooled into mortgage-backed securities that are guaranteed by Ginnie Mae.
“Those securities are sold by the issuers (banks/nonbanks) in the secondary market,” Leibowitz said. “The buyers of these securities know that they are guaranteed by the full faith and credit of the U.S. government.”
What types of loans does Ginnie Mae secure?
Ginnie Mae doesn’t technically secure loans. It guarantees MBSs made up of various types of government-backed loans, including FHA loans, VA loans and USDA loans.
FHA loans
FHA loans are insured by the federal government through the Federal Housing Administration. FHA-backed loans are a popular choice among first-time homebuyers because of their low down payment requirements (as low as 3.5%).
According to Leibowitz, FHA loans are best for people with weak credit, people who can’t make a large down payment or people who have experienced bankruptcy or foreclosure.
VA loans
VA loans are guaranteed by the Department of Veterans Affairs and are available to military members, veterans and their eligible family members. VA-backed loans typically have no down payment requirements.
USDA loans
USDA loans are guaranteed by the U.S. Department of Agriculture. These loans help low- to moderate-income borrowers in rural areas qualify for mortgages.
PIH loans
The U.S. Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing (PIH) is responsible for home loans for Native Americans.
How Ginnie Mae differs from Fannie Mae and Freddie Mac
Although Ginnie Mae sounds similar to Fannie Mae and Freddie Mac, they’re not the same.
“Ginnie Mae is government-owned; [It] handle[s] mortgages that are insured or guaranteed by federal agencies,” said Melissa Cohn, regional vice president at William Raveis Mortgage. “Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs), while Ginnie Mae is a government enterprise.”
Ginnie Mae doesn’t own mortgages or MBSs, nor does it set underwriting or credit requirements. In comparison, Fannie Mae and Freddie Mac both purchase conventional mortgage loans from lenders in order to package and resell those loans as MBSs to investors. These GSEs establish specific underwriting guidelines for their approved lenders.
Conventional mortgages typically carry stricter underwriting requirements than government-insured loans. For example, the minimum credit score for a conventional mortgage is typically 620, but you can qualify for an FHA mortgage with a score as low as 500.
» MORE: Conventional mortgage vs. FHA
FAQ
When was Ginnie Mae created?
Ginnie Mae was created in 1968 to support the liquidity and stability of the U.S. mortgage market and to expand housing access to low- and moderate-income communities and people of color.
Is Ginnie Mae a government agency?
Ginnie Mae is a government agency within the U.S. Department of Housing and Urban Development.
Who can invest in Ginnie Mae securities?
Ginnie Mae securities are backed by the full faith and credit of the U.S. government, making them a popular choice for investors seeking safe and stable investments. They are available for purchase by individuals, institutional investors and foreign entities.
Are Ginnie Mae securities risk-free?
While Ginnie Mae securities are backed by the U.S. government, they’re not completely risk-free since no investment is entirely risk-free. However, Ginnie Mae has a good track record. It has never needed a government bailout and it doesn’t carry long-term debt, according to its website.
How does Ginnie Mae impact the housing market?
Ginnie Mae plays a critical role in the housing market by providing liquidity to mortgage lenders. Its guarantee of MBSs containing government-insured loans attracts investors, which enables lenders to continue providing mortgages to homebuyers. In 2024, Ginnie Mae securitized 1.3 million loans, of which 46% were first-time homebuyers loans.
Is Ginnie Mae the same as the FHA?
Ginnie Mae and the FHA are two separate entities. Ginnie Mae is responsible for guaranteeing MBSs that include federally insured mortgages, which helps keep interest rates on those mortgages low. The FHA sets its own mortgage requirements and guarantees federally insured mortgages that are often taken out by first-time and low- to moderate-income homebuyers.
According to Ginnie Mae, FHA-insured mortgages accounted for 64% of issuance in Ginnie Mae pools in 2024.
Bottom line
While Ginnie Mae does not originate or sell home loans, it can play an important part in your homebuying journey as a behind-the-scenes guardian of the mortgage market. If you’re considering a government-backed loan, Ginnie Mae makes it possible for your lender to offer you more favorable terms and competitive interest rates.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Ginnie Mae, “Ginnie Mae Annual Report 2024.” Accessed Nov. 25, 2025.
