(MONEY Magazine) – The Federal National Mortgage Association got a lot of attention last month when it announced that it would buy rollover mortgages -- fixed-rate loans that run for seven years with an option to renew for 23 years at a new rate. The short initial term makes these loans slightly less risky for lenders than 30-year fixed-rate mortgages, so the initial rates should be 0.25 to 0.38 points below market level. But two relatively unheralded developments in the mortgage market could offer even better deals for those who qualify: -- Congress raised the maximum on Federal Housing Administration mortgages to $124,875 from $101,250 for residents of 170 high-priced housing markets, including New York, San Francisco and Seattle. As a result, the Mortgage Bankers Association estimates that 100,000 more buyers will be eligible for FHA loans, which require low down payments -- less than 5%. -- The Government National Mortgage Association said it would buy Veterans Administration-backed mortgages as large as $184,000, up from $144,000. The VA estimates that the higher limits will enable 14,000 former members of the armed forces to take advantage of the no-down-payment program.

BOX: COMMON INDEXES FOR ARMS One-year Treasury constant maturity 7.92% 11th District cost of funds 8.48 National mortgage contract rate 9.68

Note: Averages are for January, December and January respectively

Source: HSH Associates

CHART: NOT AVAILABLE CREDIT: Source: HSH Associates CAPTION: BEST FIXED RATES IN THE 24 LARGEST METRO AREAS

CHART: NOT AVAILABLE CREDIT: Source: HSH Associates CAPTION: TOP ARMS IN THE 24 LARGEST METRO AREAS