Ginnie Mae has released guidance on its previously announced liquidity support program, which issuers can request an advance from Ginnie Mae to address funding shortfalls they may be facing due to the pandemic. These advances will enable issuers to continue making scheduled payments to their investors and avoid disruptions in the mortgage servicing and MBS capital markets as borrower forbearance and loss mitigation programs are implemented nationwide.
Ginnie Mae will advance funds at a fixed interest rate, which will be applied to a given month’s pass-through assistance to all issuers and posted on Ginnie Mae’s website on the second day of each month. This additional support will cover principal and interest and does not extend to taxes and insurance.
“This is an extraordinary and last resort option for Issuers in these unprecedented times, that will enable them to continue to serve homeowners and renters in America who rely on the government mortgage programs financed by Ginnie Mae,” said Ginnie Mae’s Seth Appleton. “As important, this program underscores Ginnie Mae’s commitment to ensure timely payment of scheduled principal and interest to investors holding our MBS in all market conditions.”