A shareholder owned and operated financial institution, chartered by the federal government, that facilitates the flow of investment funds to specific economic sectors, thereby providing access to national capital markets. The activities of these private entities are not included in federal budget totals. But because of their special relationship to the government, GSEs provide detailed statements as supplementary information for budget presentation. Examples of GSEs include the Federal National Mortgage Association (Fannie Mae), the Student Loan Marketing Association (Sallie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac).
A privatized institution that is backed by the federal government (a "quasi-governmental" agency). Fannie Mae (formally the Federal National Mortgage Association) and Freddie Mac (formally the Federal Home Loan Mortgage Corporation) were chartered by Congress to create a secondary mortgage market to assure the availability of mortgage credit throughout America. Both GSEs are profit-making shareholder-owned corporations. The GSE Charter Acts and the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 require the GSEs to extend the benefits of the secondary mortgage market to a broad range of Americans, including those traditionally underserved by the credit markets.