What is the primary function of Ginnie Mae?

The primary function of Ginnie Mae, which stands for the Government National Mortgage Association, is to guarantee principal and interest payments for investors in mortgage pools. This includes ensuring that the timely payment of benefits is made to investors regardless of whether the mortgage loan payments are made by borrowers. This guarantee helps attract more investors to the mortgage market, which in turn helps to lower mortgage rates and expand access to affordable housing.

By providing this guarantee, Ginnie Mae plays a crucial role in the secondary mortgage market, enabling lenders to sell their loans and use the proceeds to make more loans. This process bolsters the liquidity of the mortgage market and supports borrowers in obtaining financing.

The other options describe functions that are not part of Ginnie Mae's role. For example, guaranteeing real estate investments is a broader concept not limited to Ginnie Mae's specific focus on mortgage-backed securities. Regulating interest rates on loans is the domain of entities like the Federal Reserve and is not a function of Ginnie Mae. Providing funds for residential construction is more aligned with the roles of other government programs or financial institutions rather than Ginnie Mae's core functions.