HUD indicators settlement with South Korean housing finance agency to spur MBS investment
The U.S. Department of Housing and Urban Pattern (HUD) and Ginnie Mae on Friday signed a memorandum of conception (MOU) with a South Korean housing finance authority, with the intention of accelerating investment in U.S. agency mortgage-backed securities.
The settlement, signed with the Korea Housing Finance Corp. (KHFC), “underscores a shared commitment to expanding access to reasonable housing, cultivating innovation, and supporting residential vogue,” in step with HUD.
It establishes a framework for “figuring out and putting off limitations to public and non-public capital flows into housing finance systems, with an emphasis on prolonged-length of time, real investment.”
The MOU comes amid tariffs that President Donald Trump lately imposed on South Korean items, in conjunction with 25% on autos and 25% on steel and aluminum imports. South Korea is negotiating with the U.S. to secret agent exemptions or decrease tariffs.
“This partnership reflects HUD’s unwavering commitment to expanding solid, reasonable housing opportunities for the American other folk,” HUD Secretary Scott Turner said in ready remarks.
“Working strategically with our South Korean allies, we are expanding the realm conception of American housing finance, while increasing capital flows within the US, strengthening our home capital markets, and unlocking recommendations to profit American borrowers. This settlement signals that, under President Trump’s leadership, our allies are ready and willing to realize alternate in The US all over again.”
In accordance with Ginnie Mae‘s May perhaps perhaps 2025 Global Markets Analysis List, South Korea held about $35.46 billion in U.S. agency mortgage-backed securities (MBS) as of March 1, down a bit from the prior three quarters.
South Korea furthermore owns roughly $122 billion in U.S. Treasury securities. It ranks eighth among all nations for holdings of agency bonds and 17th for Treasury securities.
Right here is the first time KHFC — which is owned by the Bank of Korea and the authorities — has signed this make of settlement with HUD, which administration officers call a signal that The US is “all over again start for alternate.”
Joe Gormley — who is main Ginnie Mae within the absence of a corpulent-time, Senate-confirmed president — said closing month that there stays a sturdy world market for Ginnie Mae securities. He said he has no longer viewed any pullback from world investors no topic the alternate wars.
In accordance with the company’s diagnosis, Japan, China and Taiwan owned roughly 48% of all foreign-owned agency debt as of December 2024.
Nonetheless China in suppose has been selling its agency holdings since 2023. China equipped $51.5 billion in agency MBS between December 2023 and December 2024, and one other $11.8 billion within the first quarter of 2025.
Canada and Ireland furthermore shed about $10 billion in agency MBS within the first quarter, even supposing Japan, Taiwan, Luxembourg and the British Virgin Islands helped accomplish up for these losses.
Ginnie Mae is pondering taking a detect at recommendations to introduce extra non-public capital into its ecosystem. Importantly, the company is taking a detect at though-provoking from a monthly liquidation file to a on an habitual basis file, Gormley said closing month.
