Government Sponsored Enterprises (GSEs)

Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBs) are government-sponsored enterprises (GSEs) that help bring capital to the housing markets. Their regulator is the Federal Housing Finance Agency (FHFA).

HFAs and the Housing GSEs
The GSEs are critical to providing liquidity, stability and affordability to the mortgage market, particularly for long-term, fixed-rate mortgage loans. Fannie Mae and Freddie Mac purchase and securitize mortgage loans from housing finance agencies (HFAs) and other lenders who then use the proceeds to finance more mortgage loans. The FHLBs provide advances and other financial products to support their members’ affordable housing activities.

Both Fannie Mae and Freddie Mac have done business with the HFAs to help support affordable single-family and multifamily housing opportunities. Both firms currently offer specific HFA-only, income-targeted products that allow HFAs to sell single-family loans with preferred terms.

In addition, until recent years, Fannie Mae and Freddie Mac were large purchasers of Housing Bonds and Housing Credits. Both firms plan to resume their Housing Credit investments soon.

Some HFAs have also partnered with the various FHLBs to finance their single-family and multifamily programs. HFAs are allowed to join their local FHLB ranch as associate housing members.

GSE Reform

NCSHA supports a strong, healthy GSE system in order to ensure stability, liquidity, and affordability in the home mortgage market. NCSHA supports a housing finance system with an explicit government guarantee, robust affordable housing goals, and a clear commitment to partnering with HFAs.

Moving forward, NCSHA will continue to work with Congress, FHFA, and other executive branch agencies to advocate for a future housing finance system that supports the housing needs of all Americans and encourages GSE-HFA partnerships.