(MONEY Magazine) – In the February Money Helps column, it was suggested that perhaps I am too busy cleaning up HUD to approve the Federal Housing Administration insuring PLAMs (price-level adjusted mortgages), which the column urges will make home ownership more affordable. That's not the case. While reform is certainly a top priority of mine, PLAMs have not been approved by this department for some very serious and important reasons. At a time when the FHA is experiencing substantial losses, it is only prudent that the department thoroughly resolve these issues before offering a new and untested mortgage instrument. As your story pointed out, it is true that PLAMs would appear to make home ownership more affordable by dramatically lowering initial mortgage payments. But I've learned one important dictum from economics: there is no such thing as a free lunch. The reality is that these low initial ''teaser'' payments grow quickly as people actually go deeper into debt each year to cover the inflation component of their home mortgage interest. This may be manageable if home prices and family income outpace inflation. But if they lag behind inflation, as they have in certain areas of the country in recent years, many families might not be able to afford the rising payments and default on their government-insured mortgages. Conventional FHA mortgages, of course, are also susceptible to this problem but not nearly as much, since conventional mortgage balances do not increase with inflation. The risk of default loss to the FHA could be alleviated by a larger down payment, but this would eliminate those most in need of help from the FHA -- for example, first-time home buyers who cannot afford a large down payment. Jack Kemp Secretary, U.S. Department of Housing and Urban Development