Housing Government Sponsored Enterprise Programs

Program Summary

(Dollars in millions)

Summary and Explanation of Programs

There are four Housing Government 

Sponsored Enterprise (GSE) programs, 

including Fannie Mae and Freddie Mac, and 

the Federal Home Loan Banks (FHLBs) that 

Treasury has utilized. These programs were 

created to provide stability to the financial 

markets and promote mortgage affordability 

while protecting the taxpayer. 

Preferred Stock Purchase Agreements 

(PSPAs) ($13 billion in obligations) 

This measure enhances 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 

mortgage-backed securities investors. This 

commitment also significantly diminishes the 

potential for 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. Under the Preferred Stock Purchase 

Agreements (PSPA), Treasury has helped to 

ensure the viability of the GSEs by providing 

$146.4 billion of investment, net of dividends

the GSEs paid to Treasury as of December 31, 

2011. Treasury estimates that it will make 

$39.7 billion in payments under its funding 

commitment in FY 2012 and $12.7 billion in 

FY 2013.

GSE Mortgage-Backed Securities (MBS) 

Purchase Program (No funding) 

To promote the stability of the mortgage 

market, Treasury has purchased GSE 

Mortgage-Backed Securities (MBS) in the 

secondary market. 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. 

Treasury purchased approximately $225 

billion of MBS during the purchase phase of 

the program, which ran from September 2008 

until the expiration of purchase authority on 

December 31, 2010. As a result of scheduled 

principal repayments, the portfolio declined to 

$136 billion face value as of March 1, 2011. 

On March 21, 2011, Treasury began the 

orderly disposition of the MBS portfolio at a 

rate of up to $10 billion face value per month, 

subject to market conditions. Based on current 

market conditions, Treasury expects to make a 

profit for taxpayers on its MBS portfolio. 

Preferred Stock and Program Accounts

2011

Actual

2012 

Estimate

2013

Estimate

Increase (+)

Decrease (-)

Obligations:

 Preferred Stock Purchase Account

 GSE MBS Purchase Program Account

$21,766

$7,917

$39,745

$151

$12,700

$11

-$27,045

-$140

Budget Authority:

 Preferred Stock Purchase Account

 GSE MBS Purchase Program Account

$21,766

$7,918 

$39,745

$154

$12,700

$17,000

-$27,045

-$137

Outlays:

 Preferred Stock Purchase Account

 GSE MBS Purchase Program Account

 $21,766

$7,922

$39,745

$155

$12,700

$11

-$27,045

-$144
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 to be converted into 

new mortgages prior to the end of calendar 

year 2012. This temporarily allows the HFAs 

to issue new housing bonds consistent with

what they would ordinarily have been able to 

issue with the allocations provided them by 

Congress but are unable to issue given the 

challenges in housing and related markets. 

The program is sized to support over one

hundred thousand new mortgages to first time 

homebuyers. The NIBP also supports 

development of tens of thousands of 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, 

however the funds remaining in escrow may 

continue to be used for the issuance of new 

mortgages through December 31, 2012.

Temporary Credit and Liquidity Program 

(TCLP) (No funding)

Through Fannie Mae and Freddie Mac, the 

TCLP provided replacement credit and 

liquidity facilities 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, 

Treasury announced that it will extend TCLP 

for three years, to the end of 2015, for any 

HFAs that submit a satisfactory plan 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 2013.