United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2000-07-25 monographic deposited born digital 12 p. GA 1.13:T-GGD-00-182 https://www.govinfo.gov/app/details/GAOREPORTS-T-GGD-00-182 P0b002ee180393b10 f:gg00182t DGPO 2010-08-12 2011-03-24 GAOREPORTS-T-GGD-00-182 machine generated eng fdlp REPORT GAOREPORTS-T-GGD-00-182 T-GGD-00-182 Mortgage programs Financial management Government sponsored enterprises Mortgage-backed securities Mortgage loans Testimony GGD

The efforts of Fannie Mae and Freddie Mac have successfully lowered mortgage cost and increased home ownership in the United States. However, these two government-sponsored enterprises had combined debt and mortgage-backed securities liabilities of more than $2 trillion at the end of 1999. The enterprises' close relationship with the federal government and their federal charters provide them with advantages. First is the perception in the financial markets that the government would not allow the enterprises to fail, thus allowing them to borrow at relatively lower cost than private firms. Their charters also exempt them from paying state and local income taxes and some of the fees charged by the Securities and Exchange Commission for securities. Each enterprise has a $2.25 billion conditional line of credit with the Department of the Treasury. Federal sponsorship creates significant risks and costs because taxpayers might end up paying part of that more than $2 trillion debt. The 1992 Federal Housing Enterprises Financial Safety and Soundness Act established the Office of Federal Housing Enterprise Oversight to ensure adequate capitalization and safe operations. The act also provided the Department of Housing and Urban Development with additional regulatory authority to ensure that the enterprises fulfill their housing finance mission. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-GGD-00-182/html/GAOREPORTS-T-GGD-00-182.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-T-GGD-00-182/pdf/GAOREPORTS-T-GGD-00-182.pdf GAO/T-GGD-00-182 https://www.govinfo.gov/app/details/GAOREPORTS-T-GGD-00-182 Testimony GAO/T-GGD-00-182; Housing Enterprises: The Roles of Fannie Mae and Freddie; Mortgage programs Financial management Government sponsored enterprises Mortgage-backed securities Mortgage loans Title 12 Section 4541-2 12 U.S.C. 4541-2