GSE (Government-Sponsored Enterprises)

Government-Sponsored Enterprises (GSEs) are financial institutions created by the U.S. government to enhance the availability of credit and lower borrowing costs for specific sectors, primarily housing and agriculture. They include entities like Fannie Mae and Freddie Mac, which support the mortgage market by buying loans from lenders, providing liquidity and stability. This helps ensure that more Americans can access affordable housing. While they operate with private profits, their backing by the government means they can borrow at lower rates, promoting broader economic benefits while posing some risks to taxpayers.