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Since its inception in August 1968, the Government National Mortgage Association, “Ginnie Mae” has facilitated social capital investments in affordable housing to advance the needs of America’s underserved communities. As we near the end of our anniversary month, I reflect upon how one of the original United States social enterprises started, where we are today, and what’s ahead.

Ginnie Mae’s History

The genesis of Ginnie Mae can be traced back to the Great Depression, the 1929 stock market crash, high unemployment rates and unprecedented loan defaults - including home loans. When the surge in home foreclosures further depressed home values and the nation’s overall economy, Congress moved to enact the National Housing Act of 1934. The National Housing Act created the Federal Housing Administration (FHA), whose primary goal was to resuscitate the U.S. housing market and introduce mortgage insurance backed by the federal government. In 1938, the Federal National Mortgage Association (Fannie Mae) was created to buy FHA-insured loans from lenders, providing liquidity to support higher risk loans to borrowers who needed credit the most. While helpful, the legislation that created both the FHA and Fannie Mae had limited success in establishing homeownership opportunities for all citizens.