Housing rescue: What you need to know

In brief: This idea would allow housing finance agencies, which are state chartered organizations created to help low- to moderate-income home buyers get mortgages, to issue tax-exempt bonds to help troubled home owners refinance mortgages.

Under current regulations, these bonds can only be used to finance below-market-rate mortgages for first-time home buyers. The plan would also expand the dollar amount of bonds that the state agencies could sell by $10 billion over the next three years.

The argument: Home owners struggling with high-cost mortgages could refinance into low-interest-rate loans through this program. Lenders would get their principal back and borrowers would lower their monthly payments.

Who backs it: Practically everybody, including the Republicans in Congress, as well as Democrats and the Bush Administration, have come out in favor of this proposal.

Who's against it: The states have given this proposal a lukewarm reception. Many already sell as many of the bonds as they can, according to a spokesman for Rep. Frank, so increasing the loan limits would have little impact.

Taxpayer price tag: This plan should be self-sustaining, but the federal government will take a revenue hit because the bonds are tax-free.

Status: This has a good chance to pass as part of the Foreclosure Prevention Act of 2008, or if it is attached to another economic stimulus bill, said Seiberg.

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