Ginnie Mae is reassuring lenders that they can securitize government-backed loans so long as they have loan commitments issued by the Rural Housing Service or other guaranteeing agencies.
“To be clear, single-family loans continue to remain eligible for securitization so long as they meet requirements for insurance/guaranty of the insuring/guaranteeing agency when they are pooled and are in the process of being insured or guaranteed,”
In the case of RHS, the agency is not issuing new commitments due to the government shutdown. And it is not issuing loan guarantees until Congress passes a new appropriations bill.
However, lenders with RHS conditional commitments issued before the Oct. 1 shutdown can close loans and pool them into Ginnie Mae MBS.
In other words, RHS lenders can securitize loans in their existing pipeline.
Where a RHS loan is “closed consistent with a valid conditional commitment from the U.S. Department of Agriculture, the loan may be pooled to back a Ginnie Mae guaranteed security—notwithstanding that the final issuance of the guarantee may be delayed due to a lapse in appropriation,” Tozer said.
