Question

How are the Government National Mortgage Association and the Federal National Mortgage Association similar and different?

Answer 1

DIFFERENCES:

Government National Mortgage Association	Federal National Mortgage Association
Also known as GINNIE MAE	Also known as FANNIE MAE
Provides guarantees to cover loses lenders would suffer through federally insured or guaranteed loans, should a residential homeowner default on their borrower obligations.	Fannie Mae are publicly-traded corporations that securitize residential mortgages and sell them to investors as mortgage-backed securities.
Ginnie Mae is housed within the Department of Housing and Urban Development	Known as Government Sponsored Enterprises, private companies that are sponsored by the US Government.
Established in 1968	Fannie Mae was created in 1938
Ginnie Mae is known as a guarantor for federally backed loans	Fannie guarantees loans themselves.
Ginnie Mae issuers become financially responsible for the delinquent debt.	Fannie is responsible for the losses on the loans they guarantee
Deals with non-conventional loans such as FHA loans, VA loans, and USDA loans, also known as government-insured loans.	Fannie Mae purchases home mortgage loans from commercial banks, or big banks.

SIMILARITIES:

• Fannie Mae and Ginnie Mae are all government-sponsored mortgage companies, but each serve a different purpose and different homebuyers.
• These private companies are often referred to as “secondary market lenders” that back loans and set regulations and guidelines.
• By backing and securing home mortgage loans, they help make homeownership more accessible.

• Similar to any lender or financial institution, the financial health and stability of Fannie Mae and Ginnie Mae has a direct impact on homebuyers.

• When these organizations decline, homeownership becomes more costly and less accessible.