Fannie Mae and Freddie Mac—originally chartered as government-sponsored enterprises (GSEs) but now in federal conservatorship—help finance most home loans in the United States by purchasing and securitizing new mortgages. The budgetary treatment of the GSEs involves two different approaches: fair-value estimating of the costs of their mortgage guarantees (used by CBO) and cash-based estimating of their transactions with the Treasury (used by the Administration). CBO explains those accounting treatments, as well as procedures specified by the Federal Credit Reform Act, and their implications for budget estimates.

Read the report