Sale of Gov't Housing Agency Mulled WASHINGTON (AP) -- The Clinton administration is considering a proposal to privatize a government housing agency as it searches for more money for next year's budget, but the potential impact on consumers remains unclear. The White House's budget arm is considering the plan to sell the Government National Mortgage Association, known as Ginnie Mae, for several billion dollars to help offset the costs of new spending programs. Ginnie Mae is a wholly owned government corporation within the Department of Housing and Urban Development. It guarantees securities backed by pools of mortgages that are issued by private institutions. The mortgages are insured by the Federal Housing Administration or guaranteed by the Veterans Administration or by the Rural Housing Service. ``It's a conceptual proposal that still needs to be developed,'' said Victor Lambert, a HUD spokesman. ``It's an intriguing concept, but the devils are in the details.'' Ginnie Mae increases the supply of credit available for housing by guaranteeing payments even if borrowers can't make them. It generates $400 million a year for the government, but can bring in as much as $600 million. That is reason enough for the cash-strapped housing department to be less than eager to relinquish it, say some. ``HUD never likes to lose anything, because they've lost so much already,'' says Calvin Bradford, who runs a fair housing and lending consulting firm in Williamsburg, Va. Almost 19 million homes have been financed through Ginnie Mae securities. The agency finances more than 12 percent of all the nation's mortgages. President Clinton has already trumpeted proposals to increase military readiness, improve food safety and expand Medicare. The sale of Ginnie Mae could be one way to balance out the expenses in the budget plan, along with a proposal to raise taxes on cigarettes. The impact of any Ginnie Mae sale on home loans is unclear. Any charter to set it up a privatized company must answer whether Ginnie Mae has the backing of the Treasury Department and whether it will change the fees it pays as incentives to lenders to service loans. HUD will not speculate on the potential impact of any sale, calling it ``premature,'' Lambert said. According to a person familiar with the negotiations, HUD helped revise a plan initially proposed by the budget office to make it more ``tailored and practical.'' One possible result is that the administration could bar mortgage giants Fannie Mae and Freddie Mac from bidding to buy it. Fannie Mae and Freddie Mac are government-chartered mortgage market companies that function like commercial corporations and are publicly traded. They compete with FHA, part of the housing department, which insures mortgage loans. ``I assume they want this privatized Ginnie Mae to stand on its own and compete against Freddie and Fannie,'' said bank analyst Bert Ely of Alexandria, Va. Last month, the administration also considered adding a fee to Fannie Mae transactions. The plan was dropped after drawing strong opposition from those ``who did not want to see a tax on homeownership,'' said John Buckley, Fannie Mae's senior vice president for communications.
