Ginnie Mae Raises Net Worth Requirement From $1 Million to $2.5 Million
Ginnie Mae President Theodore W. Tozer has announced that it is increasing its net worth requirements for single family issuers for the second time in three months, from its current amount of a $1 million net worth requirement to $2.5 million. Ginne Mae also announced that it is changing the formula for calculating additional requirements above the base. Currently, additional net worth is calculated as one percent of Remaining Principal Balance (RPB), plus the amount of available commitment authority between $5 million and $20 million, plus 0.2 percent of RPB greater than $20 million. With this change, additional net worth will be calculated as 0.2 percent of the Issuer’s RPB, plus the amount of available commitment authority. Effective immediately, institutions that are seeking Issuer approval will be required to meet the new minimum net worth requirements. Existing Issuers will have until Saturday, Oct. 1, 2011, to meet the new net worth requirements. Ginnie Mae is also instituting a new liquid asset requirement. Ginnie will require that Issuers eligible for its Single Family Program have liquid assets of 20 percent of Ginnie Mae’s net worth requirement. The new liquid asset requirement will help to ensure funds are available when there is a need for cash to fund loan buyouts and/or to pay for potential indemnification requests from insuring agencies. Single Family Issuers will have until Oct. 1, 2011, to meet the new liquid asset requirement. For more information, visit www.ginniemae.gov.