Single-Family MBS: Creating a Single-Family Mortgage-Backed Security ("MBS") begins with a group of mortgage loans. The loans are underwritten by lenders to borrowers to finance properties with one- to four residential units. Fannie Mae acquires mortgage loans from lenders and securitizes a substantial majority of those loans into different security formats. From there, Single-Family MBS may be placed into other mortgage-related securities, such as Supers™, Fannie Megas®, Real Estate Mortgage Investment Conduits (REMICs), Stripped Mortgage-Backed Securities (SMBS), or other Structured Transactions. To learn more, read the Single-Family Basics document.
Beginning June 3, 2019, as part of the Single Security initiative, we began issuing Uniform Mortgage-Backed Securities (UMBS™) for all to-be-announced ("TBA") -eligible securities backed by 30-, 20-, 15- and 10-year fixed-rate single-family mortgages. In addition, all legacy TBA-eligible securities previously issued by Fannie Mae were automatically considered UMBS.
The goal of the Single Security initiative is for Fannie Mae UMBS and Freddie Mac UMBS to be fungible for deliveries into a single TBA market. In a TBA contract, the maturity, coupon, face value, price, and the settlement date of an MBS are known, but the issuer, be it Fannie Mae or Freddie Mac, and the actual unique security identifier are unknown. Learn more about UMBS and the Single Security initiative that we undertook with Freddie Mac under the direction of our regulator and conservator the Federal Housing Finance Agency (FHFA) on our Single Security webpage.
Our Guaranty: Fannie Mae guarantees investors timely payments of principal and interest on MBS, UMBS, and resecuritizations that it issues or wraps1. While Standard & Poor's, Fitch, Moody's and other similar rating agencies have not rated any of the MBS issued directly by Fannie Mae, securities collateralized by Fannie Mae MBS and issued by other entities are rated consistently as "Triple A" (AAA), the highest quality. The payments of principal and interest on certificates issued by Fannie Mae are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any of its agencies or instrumentalities other than Fannie Mae. Fannie Mae uses prudent underwriting guidelines to evaluate the credit quality of the loans it guarantees to minimize losses to its investors.
Why invest in Fannie Mae? Fannie Mae MBS offer investors high quality assets with attractive yields to fit their portfolio needs or investment strategies. Investors should exercise care to fully understand the value of any mortgage-backed investment and diligently review the applicable disclosure documents. Furthermore, investors may wish to discuss the potential risks versus rewards of investing in MBS with their investment advisors.
Additional data related to Single-Family MBS can be located via the tools on the right and via additional links outlined below.
1 Resecuritizations will permit the commingling of Fannie Mae UMBS and Freddie Mac UMBS. The Enterprise that issues (wraps) the resecuritizations is the guarantor.
Page last revised: 10/29/19