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Finance Dictionary and Glossary of Investment Terms
Government National Mortgage Association
GNMA or Ginnie Mae. A government-owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because the payments to investors are guaranteed by the full faith and credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities.
Also known as Ginnie Mae, the association buys home mortgages and packages them into mortgage securities that are then resold to investors. The resulting securities are fully taxable, but they are backed by the government and so default is virtually impossible. These mortgage-backed bonds are also highly liquid and pay more interest than Treasury securities.