A program by the U.S. Treasury Dept. aims to provide $29 billion to state and local housing finance agencies over the next year.  Housing finance agencies provide loans to low- and moderate-income borrowers and have faced challenges in recent months as investors have been reluctant to purchase their debt.

Under the program, the Treasury Dept., along with Fannie Mae and Freddie Mac, will buy bonds used by housing finance agencies to fund mortgages.  California’s Housing Finance Agency (CalHFA) received the largest allocation of any housing finance agency--$1.6 billion of the $1.7 billion it sought.

The Treasury hopes the program will help stabilize the housing sector, while providing another avenue for borrowers to secure affordable loans.  According to the National Council of State Housing Agencies, local housing agencies generally assist 100,000 borrowers each year.