Also written as:
GSE
Government-Sponsored Enterprise. The category of quasi-government entities that includes Fannie Mae and Freddie Mac — chartered by Congress, but privately held.
GSE — Government-Sponsored Enterprise — is the category of organizations that includes Fannie Mae and Freddie Mac. They were created by Congress to serve a public policy mission (supporting housing finance) but operate as private companies with shareholders.
The unique structure causes confusion. GSEs aren't government agencies, but they aren't fully private either. They've operated under federal conservatorship since 2008 when the housing crisis required a massive government bailout.
For practical mortgage purposes: when people say "the GSEs" they almost always mean Fannie and Freddie. Their guidelines define what a "conforming loan" is. Their underwriting systems (Fannie's DU and Freddie's LP) automate the approval of most conventional mortgages in the country.
Example
When a Benchmark loan officer says "we'll run it through DU" or "the GSEs will buy this loan," they're talking about Fannie and Freddie. Almost every conventional mortgage in America is sold to one of these two GSEs after closing.
Also known as
GSE, government-sponsored enterprise, Fannie Mae and Freddie Mac