Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 1

What type of loans does Ginnie Mae oversee?

1. Private loans

2. Government-insured loans

3. Conventional loans

4. Subprime loans

The correct answer is: Government-insured loans

Ginnie Mae, or the Government National Mortgage Association, primarily oversees government-insured loans. These loans are typically backed by federal programs such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the United States Department of Agriculture (USDA). The significance of Ginnie Mae's role is rooted in its mission to promote housing affordability and access to credit. By insuring these loans, it encourages lenders to extend credit to a broader range of borrowers, including those who might not qualify for conventional loans. This ensures that low to moderate-income families have opportunities to purchase homes and strengthens the housing finance system overall. In contrast, private loans, conventional loans, and subprime loans do not have the same government backing that Ginnie Mae supports. Private loans come from non-governmental lenders and can have varying terms. Conventional loans are not insured or guaranteed by the government, while subprime loans target borrowers with lower credit scores and often carry higher risk. Ginnie Mae focuses specifically on loans that are designed to meet certain federal standards, making government-insured loans the correct answer.