WASHINGTON, June 26 (Reuters) - The Obama administration on Thursday said it would tap Treasury funds to bolster the construction of affordable rental housing and extend the life of a program aimed at helping struggling homeowners avoid foreclosure.
The announcement by Treasury Secretary Jacob Lew was timed to coincide with the fifth anniversary of the Making Home Affordable program, an Obama administration initiative launched at the height of the economic crisis to revitalize the housing sector.
He said the program would be extended for at least another year. “We need to continue to be there for homeowners who are facing foreclosure, those who are struggling with increasing interest rates on their modified mortgages, and those whose homes are caught underwater,” Lew said in remarks prepared for delivery at an event to mark the program’s anniversary.
Lew also said the administration would use money from the Treasury Department’s Federal Financing Bank to help housing finance agencies fund the construction of more affordable rental housing.
The collapse of the housing market created a spike in demand for rental housing, which has driven costs up. Many Americans are renting either because they lost their homes, are afraid to buy a home or cannot access mortgage credit.
Lew said the administration was looking for ways to attract more private capital to the housing market, which is dominated by government-controlled mortgage finance firms Fannie Mae and Freddie Mac.
“I have directed my team to bring investors and securitizers together in the months ahead so we can uncover new paths to increase private investment,” he said. (Reporting by Elvina Nawaguna; Editing by Paul Simao)