A more thorough explanation:

The Office of Federal Housing Enterprise Oversight (OFHEO) is a department within the U.S. Department of Housing and Urban Development. Its main responsibility is to ensure the financial safety and stability of two government-sponsored enterprises: the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).

OFHEO was created in 1992 in response to concerns about the financial health of Fannie Mae and Freddie Mac. The agency has the authority to examine the books and records of these enterprises, as well as to set capital requirements and other safety and soundness standards.

For example, if OFHEO determines that Fannie Mae or Freddie Mac is not meeting its financial obligations, it can require the enterprises to take corrective action. This might include raising additional capital, reducing their portfolios, or changing their business practices.

Overall, OFHEO plays an important role in ensuring the stability of the U.S. housing market by monitoring the financial health of these two key players.