GSE

GSE stands for government-sponsored enterprise, a privately owned company created or chartered by the federal government to support the availability of credit in a particular market. In residential housing, the term primarily refers to Fannie Mae and Freddie Mac.

The GSEs have a significant influence on appraisal practice because they establish requirements for loans they purchase or guarantee. Their selling guides address appraisal requirements, eligible property types, reporting standards and other conditions lenders must meet when delivering loans to the secondary market. The GSEs also use automated tools to evaluate collateral risk, including Fannie Mae's Collateral Underwriter and Freddie Mac's Loan Collateral Advisor.

Both Fannie Mae and Freddie Mac operate under the oversight of the Federal Housing Finance Agency. Because so many residential mortgages are ultimately sold to or through the GSEs, their appraisal and data requirements have a broad effect on lenders, appraisal management companies and appraisers.