GSEs (Government-Sponsored Enterprises)

Government-Sponsored Enterprises (GSEs) are financial institutions created by the U.S. government to help enhance the flow of credit in the economy. They support specific sectors, such as housing and agriculture, by guaranteeing loans and providing liquidity to lenders. This makes it easier for people to buy homes or farmers to secure funding. While they operate as private entities, GSEs benefit from a unique relationship with the government, allowing them to borrow at lower rates. Prominent examples include Fannie Mae and Freddie Mac, which focus on the housing market.