Privately owned, publicly chartered entities (such as the Student Loan Marketing Association) created by Congress to reduce the cost of capital for certain borrowing sectors of the economy including farmers, homeowners, and students.
Federally chartered government-sponsored enterprises (GSEs) are shareholder-owned corporations, not federal agencies. Although GSEs, such as Fannie Mae and Freddie Mac, were created to fulfill a public purpose, the mortgage-backed bonds they issue are not insured by the government or backed by its full faith and credit.
Entities established by Congress to perform specified public-interest tasks. The two GSEs applicable to multifamily real estate financing are Fannie Mae and Freddie Mac. Both are private shareholder-owned companies operating under congressional charters that direct them to increase the availability and affordability of homeownership for low-, moderate-, and middle-income Americans.
A federally chartered, privately owned, for-profit corporation designed to provide a continuing source of credit nationwide to a specific economic sector. Congress created GSEs to ensure that reasonably priced credit was available for agricultural businesses, homebuyers and students. Several of these institutions are required to finance low- and moderate-income housing.
Enterprises established and chartered by the federal government to perform specific financial functions, usually under the supervision of a government agency, but in all cases wholly owned by stockholders rather than the government. Major examples are the Federal National Mortgage Association, the Student Loan Marketing Association, and the Federal Home Loan Banks.
Financial institutions established and chartered by the federal government that are privately owned and that facilitate the flow of funds to selected lending markets, such as residential mortgages and agricultural credit. Major examples are Fannie Mae and the Federal Home Loan Banks.
The GSEs exist to provide breadth, depth and liquidity to the mortgage market in the U.S. and do this by either guaranteeing conforming mortgages that are packaged as MBS or by purchasing them for their own portfolios. GSEs are privately owned corporations that carry the implied support of the federal government in Standard & Poor's opinion. The requirement in the GSEs' charter that all mortgages they guarantee have effective LTVs of 80% or less is the major reason for the existence of mortgage insurance in the U.S.