The Department of Housing and Urban Development (HUD) is proposing to do away with a regulation specifying the current minimum face amount of any security issued by Ginnie Mae. The existing regulation says the face amount of any security cannot be less than $25,000. Its removal will allow Ginnie to offer alternative denominations of its securities. The proposal is currently under a comment period ending June 14.
Stephen Ledbetter, director of securities policy and research at Ginnie, said that the agency's objective is to "remove unnecessary hurdles that limit investors' ability to own Ginnie Mae securities." He added that currently investors could own Fannie Mae and Freddie Mac securities in $1,000 increments, whereas Ginnie requires a $25,000 minimum. This does not make sense considering that Ginnie Maes are of higher quality as they carry the full faith and credit guarantee of the U.S. government, said Ledbetter.