OFHEO (Office of Federal Housing Enterprise Oversight) was a regulatory agency that existed from 1992 to 2008. Its primary responsibility was overseeing the safety and soundness of government-sponsored enterprises (GSEs) involved in the housing finance market, specifically Fannie Mae and Freddie Mac.
OFHEO functioned as an independent agency within the U.S. Department of Housing and Urban Development (HUD). Its main objective was to ensure that Fannie Mae and Freddie Mac operated in a safe and stable manner, with prudent risk management practices and adequate capital reserves.
The agency's duties included conducting regular examinations and evaluations of the GSEs' financial condition, business activities, and risk exposures. OFHEO was authorized to set regulatory standards and guidelines for Fannie Mae and Freddie Mac, monitor their compliance, and take appropriate enforcement actions if necessary.
Additionally, OFHEO played a crucial role in promoting transparency and public disclosure of information by the GSEs. It required Fannie Mae and Freddie Mac to file regular financial reports and disclosures to maintain market confidence and provide investors with accurate and reliable information.
In 2008, the Housing and Economic Recovery Act dissolved OFHEO and transferred its responsibilities to the newly formed Federal Housing Finance Agency (FHFA). FHFA took on the role of overseeing Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, combining the regulatory functions previously carried out by OFHEO with additional supervisory powers.
