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What is the policy objective of the Federal Reserves program to purchase direct obligations of the housing-related GSEs?

April 26, 2017Federal gses housing-related Objective obligations policy program purchase Reserve

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What is the policy objective of the Federal Reserves program to purchase direct obligations of the housing-related GSEs?

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The goal of these debt purchases, combined with the purchases of mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac and Ginnie Mae announced on November 25, 2008, is to reduce the cost and increase the availability of credit for the purchase of houses. Purchases of housing-related GSE direct obligations are intended to narrow the spreads between rates on GSE direct obligations and U.S. Treasury debt. On March 18, 2009, the FOMC reaffirmed this goal by expanding the GSE direct obligation purchase program by up to $100 billion, to a total of up to $200 billion by the end of the year.