U.S. government announced Monday a new initiative to boost the housing market, helping support low mortgage rates and expanding resources for low and middle income borrowers to buy or rent homes.

According to a report released by the Treasury Department, the new plan includes two parts: a new bond purchase program to support new lending by housing finance agencies (HFAs) and a temporary credit and liquidity program to improve the access of HFAs to liquidity for the agencies' outstanding bonds.

"This initiative is critical to helping working families maintain access to affordable rental housing and homeownership 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, but the housing downturn has hit these organizations too," he said.

"Housing Finance Agencies are critical partners to helping American families through this tough economic time," Department of Housing and Urban Development (HUD) Secretary Shaun Donovan said. "Today's announcement makes clear this Administration's commitment to providing responsible homeownership opportunities, affordable rental homes and getting our housing market back on track."

The government did not disclose the cost of the new initiative but said 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."

The new plan is expected to be launched in November, the month when a 8,000 dollar tax credit for first-time home buyers expires.

The tax credit plan, which has been a key drive for the ailing home market in recent months, is a part of the U.S. government's rescue plan for housing market launched earlier this year.

Latest data showed that the price of the housing market is still about 30 percent lower than its peak in 2007. Foreclosure rate remains climbing.

Many economist say that the U.S. housing market need more support. But others worry that too much government support may reinflate the same asset bubble that got the country into the worst recession after the Great Depression.

In its latest report, the Federal Reserve reaffirmed to keep the country's core interest rate at the historical low level for "an extended period."

(Xinhua News Agency October 20, 2009)