The U.S. Treasury will provide up to $35 billion over the next three years to state housing agencies to support low- and moderate income mortgages, according to new reports.
The program will provide assistance to government-funded state housing finance agencies in California and elsewhere, which have been suffered from many of the same problems as the rest of the mortgage industry over the past year and a half, with rising foreclosures and difficulty in selling their mortgages to investors putting a morose crimp in their finances.
Treasury officials were cited by Bloomberg News and the Wall Street Journal as saying the Obama Administration could announce the program within the next few days.
The administration reportedly plans to offer up to $15 billion in direct funding and purchase up to $20 billion in state housing agency mortgage debt, thereby freeing up additional capital to enable them to make new loans.