US in new move to aid housing market

       The United States unveiled on Monday a new plan to boost the beleaguered housing market, helping support low mortgage rates and expanding resources for cash strapped borrowers to own or rent homes.
       The two-pronged plan will involve a bond purchase programme to support new lending by housing finance agencies and a temporary credit and liquidity programme for the agencies to finance outstanding bonds.
       "This initiative is critical to helping working families maintain access to affordable rental housing and home ownership in tough economic times," said Treasury Secretary Timothy Geithner.
       "Through the years, many low and moderate income Americans have been well served by state and local HFAs (housing finance agencies), but the housing downturn has hit these organisations too," he said.
       Through the new initiative, Geithner said, President Barack Obama's administration aimed to help the agencies "jumpstart new lending" to borrowers and better support financing costs of their current programs -"key components in stabilising the housing market overall."
       The cost of the new initiative is not immediately available but the government said in a statement that the plan would provide "hundreds of thousands of affordable mortgages for working families and enable the development and rehabilitation of tens of thousands of affordable rental properties.
       "It will do this at little or no cost to the taxpayer because it is paid for by the HFAs themselves and, as a temporary program, it incentivises HFAs to transition back to market sources of capital as quickly as possible," said the statement issued by the Treasury and two government housing-related agencies.
       The new plan is expected to be launched next month, Treasury Deputy Secretary Michael Barr said.
       The programme is an offshoot of legislation passed by lawmakers last year to cushion the collapse of the housing industry, epicentre of a financial crisis that dragged the United States into its worst recession in decades.
       The government move on Monday to help the housing market came ahead of the expiration next month of a $8,000 tax credit for first-time home buyers,part of various programmes costing billions of dollars to rescue the troubled housing market.
       Lawmakers from both Obama's Democratic party and the Republicans party are keen for an extension of the tax credit which if approved would further increase the ballooning federal government deficit.
       Barr said that it was "still too early to say" when the authorities could begin unwinding the housing support programmes.