Ginnie Mae Announces Risk-Based Capital Relief Regime for Hedging of Mortgage Servicing Rights

WASHINGTON, D.C.-Today, in All Participants Memorandum 24-12, Ginnie Mae announced that issuers who have a track record of managing their interest rate exposure through Mortgage Servicing Rights (MSRs) hedging and who meet prescribed eligibility requirements may qualify for Risk-Based Capital Ratio (RBCR) requirement relief.

To determine if it will grant risk-based capital relief, Ginnie Mae will review information submitted quarterly on the issuer's Mortgage Banking Financial Reporting Form and calculate an MSR value adjustment, the percentage by which the issuer's MSR values will be reduced for the purposes of calculating RBCR. The adjustment will be based on the issuer's hedging efficacy (as defined in the APM) over the most recent 12 quarters. If issuers have not hedged in each of the last 12 quarters, Ginnie Mae will use the average of hedging performance where hedging results are available. The adjustment is strictly for compliance with RBCR; the issuer's adjusted net worth will not be adjusted, subject to the following minimum eligibility requirements:

Minimum Requirements

To be eligible for risk-based capital relief, issuers, at a minimum, must have hedged:

• At least 1 of the most recent 4 quarters, and
• At least 4 of the most recent 12 quarters.

"As we have said previously, Ginnie Mae will continue to look for ways to adjust our RBCR, where industry practice reflects demonstrable risk mitigation," said Acting President Sam Valverde. "With RBCR set to go into effect at the end of the year, we are pleased to provide this relief for proven hedging strategies."

Please consult APM 24-12 for more detailed information regarding this change.

If you have any questions regarding this announcement, please contact your Account Executive in the Office of Issuer and Portfolio Management.

Additional information about Ginnie Mae is available at www.ginniemae.gov​ and on X (formerly Twitter), YouTube, Facebook, and LinkedIn.

About Ginnie Mae

Ginnie Mae is an entirely government-owned corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie Mae mortgage-backed security (MBS) programs directly support housing finance programs administered by the Federal Housing Administration, the U.S. Department of Veterans Affairs, the U.S. Department of Housing and Urban Development's Office of Public and Indian Housing, and the U.S. Department of Agriculture's Rural Housing Service. Ginnie Mae is the only MBS to carry the explicit full faith and credit of the U.S. Government.