Government-Sponsored Enterprise (GSE)

A Government-Sponsored Enterprise (GSE) is a financial institution created by the government to support specific sectors of the economy, like housing or agriculture. GSEs, such as Fannie Mae and Freddie Mac, help improve access to credit by buying loans from banks and providing funds to keep the lending process flowing. While they operate like private companies, they have government backing, which helps them raise money at lower costs. This support makes it easier for individuals and businesses to secure loans, ultimately promoting economic stability and growth.