Skip to Content


« Back to Glossary Index

GSE is an abbreviation for Government-Sponsored Enterprise. GSEs are financial services corporation created by the United States Congress with a goal of enhancing the flow of credit to targeted sectors of the economy, to make those segments of the capital market more efficient and transparent, and to reduce the risk to investors and other suppliers of capital.

The desired effect of the GSEs is to increase the availability of credit and reduce the cost of credit to the targeted borrowing sectors by reducing the risk of capital losses to investors: mortgages, agriculture and education. Well known GSEs are the Federal National Mortgage Association, FNMA, or Fannie Mae; and the Federal Home Loan Mortgage Corporation, FHLMC or Freddie Mac.

Government-Sponsored Enterprise
« Back to Glossary Index
Skip to content