The Treasury Department is considering a plan to boost the depressed housing market by easing mortgage rates on new home loans.
The plan, which is in the development stages, would bring loan rates down as low as 4.5%, a full percentage point lower than the prevailing rates for 30-year fixed mortgages.
The plan, which was first reported by the Wall Street Journal, was confirmed by CNBC.
Under the plan, the Treasury would buy securities underpinning loans guaranteed by Fannie and Freddie , which are temporarily under the control of the government, as well as those guaranteed by the Federal Housing Administration.