Which entity purchases mortgage-backed securities from USDA, FHA, and VA loan programs?

Which entity purchases mortgage-backed securities from USDA, FHA, and VA loan programs?

• A. Fannie Mae
• B. Freddie Mac
• C. Ginnie Mae
• D. HUD

Answer: (C)

Ginnie Mae’s role is to guarantee mortgage-backed securities that are backed by government-insured or guaranteed loans from FHA, VA, and USDA programs. This guarantee of timely payments from the securities is what links those MBS to the government-backed loan programs, making Ginnie Mae the entity most closely associated with these specific loan types. Fannie Mae and Freddie Mac primarily purchase mortgages and securitize them, but they do not provide the government-backed guarantee for FHA/VA/USDA loans. HUD administers these programs but does not guarantee the securities themselves. So the correct relationship is that Ginnie Mae guarantees MBS backed by FHA, VA, and USDA loans.

Ginnie Mae’s role is to guarantee mortgage-backed securities that are backed by government-insured or guaranteed loans from FHA, VA, and USDA programs. This guarantee of timely payments from the securities is what links those MBS to the government-backed loan programs, making Ginnie Mae the entity most closely associated with these specific loan types. Fannie Mae and Freddie Mac primarily purchase mortgages and securitize them, but they do not provide the government-backed guarantee for FHA/VA/USDA loans. HUD administers these programs but does not guarantee the securities themselves. So the correct relationship is that Ginnie Mae guarantees MBS backed by FHA, VA, and USDA loans.