The Obama Administration is sending more help to the housing market.
On Monday, a new government program was revealed that will help support local and state finance agencies. The plan will help finance mortgages for first-time homebuyers and also create more properties that will be available for rent.
Recently, these agencies have had a difficult time raising money due to the credit crunch and the state of the housing market. These agencies have sold about $4 billion in tax-exempt bonds this year. This number is down from the past which is putting a limit on the amount of loans they can make.
The new plan from the Obama Administration will use Fannie Mae and Freddie Mac to help alleviate some pressure on credit. Together, the companies will package their mortgages and sell them as bonds to the treasury department.
“It’s an additional layer of assistance to borrowers who are seeking a mortgage at a time when credit is scarce,” said Howard Glaser, a mortgage industry consultant in Washington. “It doesn’t solve all the problems of the housing market, but every little bit helps.”