Ginnie Mae announces changes to its Pass-Through Assistance Program in response to Covid-19

Federal Issues Covid-19 Ginnie Mae Mortgage-Backed Securities Mortgages

On April 10, Ginnie Mae issued APM 20-03, announcing that Ginnie Mae has revised and expanded the Issuer assistance programs in Chapter 34 of the Mortgage Backed Securities Guide (MBS Guide), including the Pass-Through Assistance Program (PTAP). PTAP/C19—the PTAP that is specifically authorized for use in response to the Covid-19 national emergency—is available for Issuers that apply for assistance through an executed request and repayment agreement, and subject to a Master Supervisory Agreement, which will govern the terms of the assistance. The PTAP funds will carry a fixed interest rate for all Issuers requesting assistance in that month, to be posted on Ginnie Mae’s website on the second business day of each month.  Funds may only be used to cover shortfalls in required principal and interest payments, and may not be used for any other fees or operational costs of the servicer.  In addition, Issuers may only request assistance once in any given month. While neither a request for assistance nor the provision of assistance under the program will constitute a basis for default under the Ginnie Mae Guarantee Agreement, any breach of the Master Supervisory Agreement or related Request and Repayment Agreements will constitute an event of default under the Master Supervisory Agreement and related Request and Repayment Agreements, the MBS Guide and the Guaranty Agreement. The APM provides additional information for third-party financers and issuers on topics including use of the PTAP/C19 funds and the deadline for seeking PTAP/C19 assistance.