Government agency securities, sometimes simply called “agencies,” are debt obligations issued by Federal agencies and United States Government-sponsored corporations to help finance their operations. In addition to bonds, agency securities include mortgage and loan pass-through certificates. The certificate issuer holds pools of mortgages or loans as the underlying assets, and passes income from them to investors. Except for issues of the Government National Mortgage Association, agency securities are not generally backed by the full faith and credit of the United States government, like Treasuries. In addition to issuing debt obligations, United States Government-sponsored corporations such as the Federal National Mortgage Association may also sell equity shares.
Examples of some common agency security issuers are: • Government National Mortgage Association (GNMA or Ginnie Mae); • Federal National Mortgage Association (FNMA or Fannie Mae); • Federal Agricultural Mortgage Corporation (Farmer Mac); • Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac); • Export-Import Bank of the United States (ExImBank); • Farmers Home Administration (FmHA); • Small Business Administration (SBA); and • Tennessee Valley Authority (TVA).
This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.
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