Real Estate Mortgage Investment Conduits (REMICs) direct principal and interest payments from underlying mortgage-backed securities to classes with different principal balances, interest rates, average lives, prepayment characteristics and final maturities.

REMICs allow investors with different investment horizons, risk-reward preferences and asset-liability management requirements to purchase MBS tailored to their needs.

Unlike traditional pass-throughs, the principal and interest payments in REMICs are not passed through to investors pro rata; instead, they are divided into varying payment streams to create classes with different expected maturities, differing levels of seniority or subordination or other characteristics. The assets underlying REMIC securities can be either other MBS or whole mortgage loans.

Ultimately, REMICs allow Issuers to create securities with short, intermediate and long-term maturities, flexibility that in turn allows Issuers to expand the MBS market to fit the needs of a variety of investors​​.​​

Stripped Mortgage-Backed Securities (SMBS), which will be sold from time to time in one or more series, represent interests in separate Ginnie Mae SMBS Trusts. Ginnie Mae guarantees the timely payment of principal and interest on each class of SMBS.​

​Each Trust will be comprised primarily of:

• Fully modified pass-through mortgage-backed certificates as to which Ginnie Mae has guaranteed the timely payment of principal and interest pursuant to the Ginnie Mae I Program or the Ginnie Mae II Program, 

• Certificates backed by Ginnie Mae MBS certificates as to which Ginnie Mae has guaranteed the timely payment of principal and interest pursuant to the Ginnie Mae Platinum Program,

• REMIC or comparable mortgage certificates, or

• Previously issued Ginnie Mae guaranteed SMBS, in each case, evidencing interests in Trusts consisting primarily of direct or indirect interests in Ginnie Mae Certificates, as further described in the related Offering Circular Supplement.

Each series will be issued in two or more classes. Each class of securities of a series will evidence an interest in future principal payments and/or an interest in future interest payments on the Trust assets included in the related Trust. The Trust created for each issue of SMBS will be classified as a Grantor Trust. ​

Ginnie Mae I MBS are modified pass-through mortgage-backed securities on which registered holders receive separate principal and interest payments on each of their certificates.

Ginnie Mae I MBS are based on single-family pools and are Ginnie Mae’s most heavily-traded MBS product. The underlying mortgages generally have the same or similar maturities and the same interest rate on the mortgages. Single-family Ginnie Mae I pools have a 50 basis point (0.5 percent) guaranty and servicing fee. The Ginnie Mae I MBS also permits the securitization of multifamily mortgages. Ginnie Mae I payments are made to holders on the 15th day of each month.

Ginnie Mae I Key Program Provisions

Types of mortgage pools and guaranteed securities:

• Single-family level-payment mortgages

• Single-family buydown mortgages

• Single-family graduated payment mortgages

• Single-family growing equity mortgages

• Manufactured home loans

• Project construction loans, including multifamily residential, hospital, nursing home, and group practice facility loans

• Project (permanent) loans, including multifamily residential, hospital, nursing home, and group practice facility loans ​

The Ginnie Mae II MBS program was introduced in 1983 in response to the changing demands of the secondary mortgage marketplace.

Ginnie Mae II MBS are modified pass-through mortgage-backed securities for which registered holders receive an aggregate principal and interest payment from a central paying agent.

Ginnie Mae II MBS have become useful tools for "pipeline" management for our issuers. They also provide additional flexibility and liquidity. For example, Ginnie Mae II securities permit greater flexibility with respect to loan characteristics: coupon rates on the underlying mortgages can vary between 25 and 75 basis points above the interest rate on the pool for pools issued on or after July 1, 2003 and between 50 and 150 basis points for pools issued before July 1, 2003. Multiple-issuer as well as single-issuer pools are permitted under the program.

The Ginnie Mae II MBS also allows small issuers who do not meet the dollar requirements of the Ginnie Mae I MBS program to participate in the secondary mortgage market. In addition, the Ginnie Mae II MBS permits the securitization of adjustable rate mortgages (ARMs).

The Ginnie Mae II MBS have a central paying and transfer agent that collects payments from all issuers and makes one consolidated payment, on the 20th of each month, to each security holder.

An issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-issuer pools or through participation in the issuance of multiple-issuer pools. A custom pool has a single-issuer that originates and administers the entire pool.

A multiple issuer pool typically combines loans with similar characteristics. The resulting pool backs a single MBS issue and each participant is responsible for administering the mortgage loans that it contributes to the pool. The securitization provisions are set forth in detail in the Ginnie Mae MBS Guide.

Ginnie Mae II Key Pro​gram Provisions

There are five programs within Ginnie Mae II, each representing a different type of mortgage. Under each type, both the custom pool and multiple issuer pool approaches are permissible. Any one pool must consist of only one of the following mortgage types:

• Single-family level-payment mortgages (FHA, VA, or RD loans)

• Single-family graduated payment mortgages (FHA or VA)

• Single-family growing equity mortgages (FHA or VA)

• Manufactured home loans (FHA or VA)

• Single-family adjustable rate mortgages (FHA or VA) ​