Housing Government Sponsored Enterprise Programs

Program Summary

Dollars in Millions

 FY 2012 FY 2013 FY 2014 FY 2012 to FY 2014

 Actual Estimated Estimated $ Change % Change

Obligations

Preferred Stock Purchase Agreements 

Account 18,519 0 0 (18,519) -100.00%

GSE MBS Purchase Program Account 158 548 10 (148) -93.67%

Total Obligations $18,677 $548 $10 ($538) -98.18%

Budget Authority 

Preferred Stock Purchase Agreements 

Account 18,519 53,366 0 (18,519) -100.00%

GSE MBS Purchase Program Account 158 548 10 (148) -93.67%

Total Budget Authority $18,677 $53,914 $10 ($53,904) -99.98%

Outlays

Preferred Stock Purchase Agreements 

Account 18,519 0 0 (18,519) -100.00%

GSE MBS Purchase Program Account 152 546 10 (142) -93.42%

Total Outlays $18,671 $546 $10 ($536) -98.17%

The GSE MBS Purchase Program Account records the subsidy and financial agent services costs for both the GSE MBS purchase program 

and the State HFA Initiative. The Treasury completed the orderly disposition of the GSE MBS portfolio on March 19, 2012. All new budget 

activity in the GSE MBS Purchase Program Account is related to the State HFA Initiative. Amounts shown in the table do not include downward 

re-estimates and other amounts reflected the financing accounts. Details are provided in the Congressional Justification.

Summary and Explanation of Programs

To provide stability to financial markets and 

promote mortgage affordability while at the 

same time protecting the taxpayer, Treasury 

has implemented four programs.

Preferred Stock Purchase Agreements 

(PSPAs) (No funding)

The Preferred Stock Purchase Agreements 

(PSPAs) for Fannie Mae and Freddie Mac 

represent a commitment by Treasury to 

enhance market stability by providing 

additional security to holders of Fannie Mae 

and Freddie Mac securities. This leads to 

increased mortgage affordability by providing 

additional confidence to GSE mortgagebacked securities investors. This commitment 

eliminates any mandatory triggering of 

receivership. To this end, the PSPAs are an 

effective means of averting systemic risk 

while, at the same time, protecting the 

taxpayer. 

The PSPAs were amended in August 2012, 

which included a series of changes that 

advanced the Administration’s goals of 

responsibly winding down the GSEs while 

protecting the interests of taxpayers. These 

changes include modifying the dividend 

payment to Treasury from 10 percent to a 

dividend based on the positive net worth of 

each GSE; increasing the rate at which the 

GSEs must reduce their retained investment 

portfolio to 15 percent from 10 percent; and 

requiring each GSE to submit to Treasury an 

annual taxpayer protection plan that details its 

respective strategy for reducing enterprisewide risk profile.

Under the PSPAs, Treasury has helped ensure 

the viability of the GSEs by providing $132.3 

billion of investment, net of dividends the 

GSEs paid to Treasury as of December 31, 

2012. Treasury estimates that it will not make 

any payments under its funding commitment 
in FY 2013 and FY 2014. The Budget

estimates that Treasury will receive $15.4 

billion in dividends in FY 2013 and $29.7 

billion in FY 2014.

GSE Mortgage-Backed Securities (MBS) 

Purchase Program (No funding)

To promote the stability of the mortgage 

market, Treasury purchased approximately 

$226 billion of GSE Mortgage-Backed 

Securities (MBS) in the secondary market 

between September 2008 and December 2009. 

By purchasing these guaranteed securities, 

Treasury sought to broaden access to mortgage 

funding for current and prospective 

homeowners as well as to promote market 

stability. As a result of scheduled principal 

repayments, the portfolio had declined to $136 

billion face value as of March 1, 2011. On 

March 21, 2011, Treasury began the orderly 

disposition of the remaining MBS portfolio at 

a rate of up to $10 billion face value per 

month, subject to market conditions. Treasury 

completed the orderly disposition of its MBS 

portfolio on March 19, 2012. Overall, 

Treasury’s MBS portfolio generated $11.9 

billion in budgetary savings, calculated on a 

net present value basis as required by the 

Federal Credit Reform Act.

New Issue Bond Program (NIBP) (No funding)

The NIBP provides temporary financing for 

Housing Finance Agencies (HFAs) to issue 

new housing bonds. Treasury purchased 

securities of Fannie Mae and Freddie Mac 

backed by HFA housing bonds, with the 

funding placed in escrow pending origination 

of new mortgages prior to the end of calendar 

year 2012. This temporarily allowed the HFAs 

to issue new housing bonds consistent with 

what they would ordinarily have been able to 

issue with the allocations provided to them by 

Congress absent the challenges in housing and 

related markets.

The program was sized to support over one 

hundred thousand new mortgages to first time 

homebuyers. The NIBP also supported 

development of forty thousand new rental 

housing units for working families. 

Treasury purchased approximately $15.3 

billion under its authority for this program in 

FY 2010. Treasury’s authority to enter 

additional purchase commitments under the 

program expired on December 31, 2009. 

Funds remaining in escrow continued to be 

used for the issuance of new mortgages 

through December 31, 2012. There are 

currently no plans for the disposition of the 

portfolio.

Temporary Credit and Liquidity Program 

(TCLP) (No funding)

Treasury’s TCLP program backstops credit 

and liquidity facilities that Fannie Mae and 

Freddie Mac provide to HFAs to help reduce 

the costs of maintaining their existing 

financing. The HFAs pay fees through Fannie 

Mae and Freddie Mac designed to cover the 

credit risks of the program and all GSE 

administrative costs. 

Treasury incurred approximately $8.2 billion 

in obligations in FY 2010 that will remain 

open into FY 2013. Due to continued strain on 

the market for HFA liquidity facilities, in late 

2012 Treasury extended TCLP for three years, 

to the end of 2015, for six HFAs that 

submitted satisfactory plans on how they will 

reduce risks borne by the taxpayer and 

transition to private market liquidity providers. 

Prior to the expiration of the program, 

Treasury’s obligation will continue to diminish 

over time as HFAs redeem the bonds 

supported by the program or otherwise reduce 

their need for Treasury’s liquidity support.

Legislative Proposals

The Housing GSE programs have no 

legislative proposals for FY 2014.