Help for local housing

The Obama administration plans to commit as much as $35 billion to help cash-strapped state and local housing-finance agencies provide mortgages to low- and middle-income home buyers. The agencies, or HFAs, offer mortgages with interest rates up to one percentage point below those offered by commercial mortgage providers.

Since credit tightened in 2007, the agencies have had difficulty selling bonds to fund their lending. Under the administration’s proposal, the Treasury Department and the federally supported mortgage agencies Freddie Mac and Fannie Mae would buy $20 billion in long-term HFA bonds. Fannie and Freddie would also act as buyer of last resort for up to $15 billion in other housing bonds.