Fannie Mae and Freddie Mac will purchase housing bonds issued by the finance agencies.

The Obama administration announced another initiative to aid state and local housing finance agencies in providing mortgages to first-time and lower-income homebuyers and to assist in the development or rehabilitation of rental properties. Officials declined to put a price tag on the program, but said there would be no cost to taxpayers. Under the initiative, the Treasury Department, along with Fannie Mae and Freddie Mac will purchase housing bonds issued by the finance agencies. This will give the groups the funding needed to make new loans. The government will also provide a temporary credit program to allow the agencies to refinance their existing bonds to more favorable terms. Agencies will pay fees to participate in the program, which officials say will cover its cost. They are still working with the agencies to determine the extent of support needed. the initiative could cost as much as $35 billion. Treasury Secretary Tim Geithner explains: "This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times."