New Mortgage Help to States a Boon to Borrowers!

The New Mortgage plan will help the agencies finance mortgages for first-time homebuyers and develop rental housing. Housing Agencies have had difficulty raising money because of the housing crisis and credit crunch.

The new program will use mortgage Fannie Mae and Freddie Mac to help correct financing difficulties.. The two companies will package mortgages made by the housing agencies and sell them as bonds to the Treasury Department. While it will not solve all our credit problems,it will provide additional assistance to borrowers.

Fannie and Freddie also will help to provide short-term financing, with backing from the Treasury. State and local finance, who have pressed for federal help for months.Any losses from loan defaults will be entirely covered by fees paid by the state agencies. The agencies assist about 100,000 to 200,000 first-time borrowers a year.

There is no expected costs to the federal government for this program.