On July 28, 2021, Ginnie Mae issued All Participant Memorandum (APM) 21-03: Periodic Maintenance and Miscellaneous Announcements APM. The APM announces a number of changes and updates to the Ginnie Mae MBS Guide, most of which incorporate items previously announced in earlier APMs, correct minor typos, and provide additional clarity to provisions in the Guide that had caused confusion. Ginnie Issuers should review the Guide sections mentioned in the APM to ensure they are aware of the latest official guidance on all of these issues.
However, for companies seeking approval as multifamily Issuers, there is one critical change to the Guide that isn’t clear from the APM itself. As all potential Ginnie applicants are likely aware, Ginnie announced significant tightening of its approval standards on December 4, 2020, in APM 20-16, which affected all applicants.
For multifamily applicants, however, new standards regarding an applicant’s origination and servicing experience created an unsurmountable obstacle, in requiring that an applicant entity have a significant amount of demonstrated experience of its own. Because virtually all FHA multifamily loans are Ginnie securitized, and because only already approved Ginnie Issuers can hold and securitize such loans into Ginnie securities, it was therefore essentially impossible that any new entity would ever be able to attain such experience itself.
In a positive development, the latest changes to the Guide have revised the experience requirement. Demonstrated experience of “corporate or key personnel” can be counted toward the experience of the applicant entity itself. The revised language can be found in the Ginnie Mae MBS Guide at Chapter 2, Part 6(3)(b).