A Guaranteed Mortgage Certificate (GMC) is bond that is backed by a mortgage. Since 1975 GMCs have been issued by the Federal Home Loan Mortgage Corporation (Freddie Mac) – a public government sponsored enterprise, headquartered in Virginia.
GMCs represent interest in conventional whole loans and participations that Freddie Mac previously purchased.
They represent undivided interest in a pool residential mortgages. They have a guaranteed average life, and interest and principal are paid on a semiannual basis.
If the mortgages that back Guaranteed Mortgage Certificates prepay at a faster rate than the guaranteed minimum rate, then the investor receives complete payment of the principal.
nasdaq.com says the following about Guaranteed Mortgage Certificates:
“First issued by Freddie Mac in 1975, G.M.C.s, like PCs, represent undivided interest in specified conventional whole loans and participations previously purchased by Freddie Mac.”