A wholly owned United States Government corporation created by Congress in 1968. GNMA, popularly known as Ginnie Mae, is an important secondary mortgage market entity. The Secretary of Housing and Urban Development oversees its operations. Like FNMA, GNMA was organized to support federal housing efforts by attracting capital from the nation's capital markets for residential mortgage markets. It achieves this through its mortgage-backed securities programs, its primary activity.

Approved private lending institutions and state housing agencies, which originate or purchase residential mortgage loans, organize their mortgages into pools and then sell GNMA-guaranteed, mortgage-backed, Pass-Through Securities to investors. The securities, typically marketed through security broker-dealers, represent undivided ownership interests in a pool of these residential mortgages. Each mortgage in the pools are insured or guaranteed by the Federal Housing Administration (FHA), the Farmer's Home Administration (FmHA), or the Veterans Administration (VA). This protects the lenders. Under its Mortgage-Backed Securities Program, GNMA guarantees the timely payment of principal and interest to investors of mortgage-backed securities issued by private institutions. This protects the investors.

The GNMA-guaranteed security is a pass-through security. This means that mortgage principal and interest payments due on the pooled mortgages are passed through to the security holders monthly after servicing and guaranty fees have been deducted. The GNMA guaranty assures securities holders that they will receive timely payment of the scheduled monthly principal and interest, whether or not the homeowners make their monthly payments. GNMA's guaranty is backed by the full faith and credit of the United States. GNMA is a guarantor, a surety. The securities provide mortgage lenders with a means to replace their loaned mortgage funds with new capital from investors in order to continue to make new loans, while still retaining the right to service the mortgages in the pools. In turn, investors receive securities, which offer safety of principal, liquidity, and high yields.

There are approximately 825 approved GNMA issuers. They are responsible for administering mortgage pools representing more than $540 billion in outstanding GNMA securities. The total value of securities guaranteed by GNMA since the inception of its program exceeds $1.4 trillion. GNMA-guaranteed securities finance approximately 97% of all loans insured by the FHA or guaranteed by the DVA They have provided the funds with which approximately 22.7 million American family homes have been purchased or refinanced since 1968.