U.S. government-sponsored enterprise

A U.S. government-sponsored enterprise (GSE) is a financial organization created by Congress to improve the flow of credit in certain sectors, such as housing or agriculture. GSEs, like Fannie Mae and Freddie Mac, operate independently but work under federal oversight. They buy loans from lenders, guarantee or securitize them, and sell them to investors, helping to ensure there’s enough funding for homes and farms. This process helps stabilize markets, reduce borrowing costs, and increase access to credit for consumers and small businesses, supporting economic growth without being direct government agencies.