U.S. Government Agencies

These federal securities are backed by the full faith and credit of the U.S. government and are exempt from registration with the Securities and Exchange Commission (SEC). Some U.S. government agencies include:

• Government National Mortgage Association (GNMA)
• Federal Housing Administration (FHA)
• General Services Administration (GSA)
• Small Business Administration (SBA)

Federal Corporations

Federal government corporations are government agencies established by Congress to provide a market-oriented public service and to produce reviews that meet or approximate its expenditures. Federal corporations are not obligations of, nor are they guaranteed by, the U.S. government, but their securities are generally highly rated due to their status as a self-funded government-owned entity. A prominent federal corporation in the investment space is the Tennessee Valley Authority (TVA).

U.S. Government-Sponsored Enterprises (GSEs)

GSEs are privately owned, publicly chartered financing entities created by an Act of Congress to provide liquidity to the loans of particular groups of borrowers such as farmers, ranchers, homeowners and students. GSEs have an implied but not explicit backing of the U.S. government. These GSE agencies include:

• Federal Home Loan Mortgage Corporation (FHLMC), also known as Freddie Mac
• Federal National Mortgage Association (FNMA), also known as Fannie Mae
• The Federal Agricultural Mortgage Corporation (FAMC), also known as Farmer Mac
• Federal Home Loan Banks (FHLB)
• Federal Farm Credit System

GSEs issue both in discount and coupon notes and bonds. Discount notes have short-term maturities, ranging from overnight to 360 days. Coupon notes and bonds have maturities that extend beyond two years. GSEs are exposed to potential credit risk because they are not guaranteed by the federal government.