Administration Funds Local Housing Agencies

October 22, 2009

Source: Tami Lubby, CNNMoney.com

The Obama Administration announced a plan Monday to help state and local housing finance agencies provide mortgages to first-time and lower-income home buyers and help pay for rehabilitation of rental properties.

The plan calls for the Treasury Department, along with Fannie Mae and Freddie Mac, to purchase housing bonds issued by local finance agencies. The government also will allow these agencies to refinance existing bonds at more favorable terms.

This will allow the housing agencies, which operate in all 50 states, to lend more money.

Officials say there will be no cost to federal taxpayers because the agencies will pay fees to participate. The Treasury Department will be responsible if an agency defaults on its debt.

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