Ginnie Mae was created in 1968 as a
wholly owned corporation within the Department of Housing and Urban
Development (HUD). Its purpose was - and is
- to serve low-to moderate-income homebuyers.
The National Housing Act was enacted
on June 27, 1934 as one of several economic recovery measures. It
provided for the establishment of a Federal Housing Administration
(FHA) to be headed by a Federal Housing Administrator. Title II of
the Act provided, as one of the principal functions of the FHA, for
the insurance of home mortgage loans made by private lenders.
Title III of the Act provided for the
chartering of national mortgage associations by the Administrator.
These associations were to be private corporations regulated by the
Administrator, and their chief purpose was to buy and sell the mortgages
to be insured by FHA under Title II. Only one association was ever
formed under this authority. It was formed on February 10, 1938, as
a subsidiary of the Reconstruction Finance Corporation, a government
corporation. Its name was National Mortgage Association of Washington,
and this was changed that same year to Federal National Mortgage Association.
By amendments made in 1948, the charter
authority of the Administrator was repealed and Title III became a
statutory charter for the Federal National Mortgage Association. By
revision of Title III in 1954, Fannie Mae
was converted into a mixed-ownership corporation, its preferred stock
to be held by the government and its common stock to be privately
held. It was at this time that Section 312 was first enacted, giving
Title III the short title of Federal National Mortgage Association
By amendments made in 1968, the Federal
National Mortgage Association was partitioned into two separate entities,
one to be known as Government National Mortgage Association (Ginnie
Mae), the other to retain the name Federal National Mortgage Association.
Ginnie Mae remained in the government, and Fannie
Mae became privately owned by retiring the government-held stock.
Ginnie Mae has operated as a wholly owned government association since
the 1968 amendments.