Ginnie Mae to offer 40-year mortgage modifications

Ginnie Mae announced last week that it would create a new loan pool made up of modified loans with terms up to 40 years, 10 years longer than the current term cap of 30 years. The new pools will have a minimum size of one loan and a minimum balance of $25,000, with no caps on size as long as all loans meet the issuing agency’s requirements.

“It is probable that this pool is being created in anticipation of the number of FHA, VA, and USDA loans that will be coming out of pandemic-related forbearance plans,” according to Mortgage News Daily’s Jann Swanson, who noted that the new pools will come online in October, just as forbearance plans are set to expire. According to Ginnie Mae, the new pool is intended to “allow Ginnie Mae issuers to offer loan modifications that carry a lower monthly payment than would a 30-year term while retaining the ability to securitize the loans for sale into the secondary market.”

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