On February 18, the first Ginnie Mae securitization of the Department of Agriculture's Rural Housing Service Section 538 loans came to market. Plans for this type of securitization was first reported two years ago in ASR (see ASR 03/31/03). The $3.1 million transaction was backed by apartment complex loans originated by Indiana-based lender P/R Mortgage.

Ted Foster, vice president of MBS at Ginnie Mae, said that this is the first Ginnie securitization of multi-family mortgages that was not backed by Federal Housing Authority loans, though the guarantee program for these Rural Housing Service loans is similar to that of the FHA. "This new program allows Ginnie Mae to target smaller, much more rural areas," said Foster. "These are the areas that the FHA could be less effective in."

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