The Government National Mortgage Association has finalized plans to increase the minimum-net-worth requirement on its mortgage-backed security issuers to $2.5 million, from $1 million.
Issuers of Ginnie Mae-guaranteed mortgage-backed securities also must meet new liquidity and minimum capital standards under requirements that go into effect Oct. 1 of next year.
But the new requirements are effective immediately for any lenders applying to be a new Ginnie Mae issuer.
"Ginnie Mae is changing the financial requirements for participants in its single-family program in order to ensure that its program requirements align with the rapidly changing housing market," the agency said in a memorandum to its issuers.
Banks and thrifts must be "well capitalized" under federal bank regulations and nonbank issuers must have a 6% equity-to-asset ratio, according to the memo.
In addition, 20% of the $2.5 million net-worth requirement must consist of liquid assets to "ensure funds are available," the agency said, for loan buybacks and indemnification requests from the insuring agencies: the Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service.
Ginnie's president, Theodore Tozer, said in August in unveiling his plan to raise the financial eligibility requirements for issuers, "By imposing these important requirements, Ginnie Mae is committed to prudently managing risk, while furthering its mission to ensure the 30-year, fixed-rate mortgage is possible for millions of families no matter the market condition."