Efforts by Congress to modernize FHA could lead to an increased number of Ginnie Mae securities available to investors. The majority of the outstanding securities guaranteed by Ginnie Mae cover FHA-insured mortgages.

The estimated total is $412.3 billion. There are also many bundled mortgages, such as those through the VA, Office of Public and Indian Housing and the Agriculture Department's rural housing, that are guaranteed by Ginnie Mae.

Ginnie Mae doesn't buy and sell loans or issue mortgage backed securities, instead the company guarantees all principal and interest payments on securities backed by federally insured or guaranteed loans.

Ginne Mae has the "full faith and credit" of the government behind its loans, making it an appealing investment to the conservative.

If the Senate approves FHA reforms to reduce down payment requirements, raise loan limits and establish a risk-based insurance premium structure, Ginnie Mae could see a benefit.

The availability of Ginnie Mae secuirites could see an increase. According to Ginnie Mae, they have reduced their outstanding mortgage-backed securities from a record of $604 billion in 2001 to $412.3 billion this year. The decrease is partly due to conventional mortgage lenders who offer bigger loans with better terms than Ginnie Mae to low and moderate income buyers.

Once the act is passed, it is expected that FHA-insured production will be increased. Around 90% of all FHA loans currently go into Ginnie Mae guaranteed securities.