FHA Distinguishes GSEs from Government Institutions

Written By Era Williams

The Federal Housing Administration (FHA) announced in Mortgagee Letter 2024-12 that there will now be a distinction between Government-Sponsored Enterprises (GSEs) and other Government Mortgagees.

Historically, FHA has included the GSEs in its definition of a Government Mortgagee, thereby subjecting the GSEs to the same requirements as all other Government Mortgagees. The GSEs have long contended that because they are not originating loans, they should not be required to comply with FHA requirements related to loan and mortgage origination.

Effective immediately, Government Mortgagees are now categorized into either 1) Governmental Institutions, which include federal, state, and municipal governmental agencies and the Federal Reserve Banks, or 2) Government-Sponsored Enterprises, which include the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal National Mortgage Association (Fannie Mae), allowing FHA to impose separate requirements on each group.

To review the Mortgagee Letter in its entirety, please visit FHA Mortgagee Letter 2024-12.

Era Williams
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