USDA Rural Development Acting Under Secretary Doug O’Brien announced the expansion of a partnership with Ginnie Mae, one of the largest issuers of mortgage-backed securities in the nation to increase investments in rural rental housing. The United States Department of Agriculture (USDA) remains focused on carrying out its mission, despite a time of significant budget uncertainty. This announcement is one part of the Department’s efforts to strengthen the rural economy.
“This partnership will attract more private capital to rural markets, and ultimately bring new opportunities to rural communities,” O’Brien said. “At USDA, we understand the importance of partnerships. Together, we are able to leverage funding to increase the number of safe, clean rental units available in rural America.”
The partnership with Ginnie Mae enables it to include USDA multi-family housing loans in certain mortgage securities that can be sold to private investors. These mortgage securities are known as Real Estate Mortgage Investment Conduits (REMICs). REMICs give investors more flexibility than mortgage-backed securities by allowing investors to choose their interest rate of return on their investment and how often they can receive payments.
Ginnie Mae’s allowance of Rural Development’s Guaranteed Rural Rental Housing Program loans in its REMIC program is expected to attract more investors to the USDA program. The USDA program provides loan guarantees up to 90 percent to construct or rehabilitate affordable rural multi-family rental housing. Since 2009, the program has helped rehabilitate or build over 14,000 housing units.
USDA remains focused on carrying out its mission, despite a time of significant budget uncertainty. Today’s announcement is one part of the Department’s efforts to strengthen the rural economy.
President Obama’s plan for rural America has brought about historic investment and resulted in stronger rural communities. Under the President’s leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities. USDA’s investments in rural communities support the rural way of life that stands as the backbone of our American values. President Obama and Agriculture Secretary Vilsack are committed to a smarter use of Federal resources to foster sustainable economic prosperity and ensure the government is a strong partner for businesses, entrepreneurs and working families in rural communities.
USDA, through its Rural Development mission area, has a portfolio of programs designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.
USDA has made a concerted effort to deliver results for the American people, even as USDA implements sequestration – the across-the-board budget reductions mandated under terms of the Budget Control Act. USDA has already undertaken historic efforts since 2009 to save more than $828 million in taxpayer funds through targeted, common-sense budget reductions. These reductions have put USDA in a better position to carry out its mission, while implementing sequester budget reductions in a fair manner that causes as little disruption as possible.