Question

what is the role in the single-family sector of the GSEs?

Answer 1

A government-sponsored enterprise (GSE) is a type of financial services corporation created by the United States Congress. Their intended function is to enhance the flow of credit to targeted sectors. GSEs do not lend money to the public directly. They instead guarantee third-party loans and purchase loans in the secondary market, thereby providing money to lenders and financial institutions. The first GSEwas the Farm Credit System (FCS). It was created in 1916 to serve the farming sector. The GSEs cover 85 percent of the single-family rental market by extending loans to small investors through single-family financing. Of the remaining 15 percent, 5 percent is estimated to be owned by players with over 50 units,and just 1 percent is owned by institutional SFR investors with more than 1,000 properties.