Home Savings of America says it has added two new adjustable-rate mortgages to its product line. Both are aimed the first- time homebuyer and those in the market to trade up to bigger houses.

"The addition of these loans gives us the ability to meet the needs of all potential homebuyers." Will Barrett, executive vice president of consumer lending at the H.F. Ahmanson & Co. subsidiary, said in an announcement on Monday.

One of the loans, called 12-MAT, is tied to the average of the 12 most recently published monthly yields of U.S. Treasury bills with one year left to maturity. The index is slower-moving and more predictable than other ARM indexes, the thrift said. It added that because this index is a moving average, it protects borrowers from sudden shifts in interest rates.

The 12-MAT loan is available with as little as 5% down, with the entire down payment allowable in the form of a gift from a direct family member. Additional features include a low lifetime cap, no points or lender-fee options, and no private mortgage insurance - and it is assumable.

Home Savings' other new loan is based on the 12-month average of the one-month London interbank offered rate. Its other features are the same as on the 12-MAT loan. Both programs are available on first mortgages and on refinancings with terms of 15 and 30 years.

Home Savings, which has long been a cost of funds index lender, began diversifying its product line more than a year ago. The index, popular at many California institutions, is tied to an index compiled by the Federal Home Loan Bank of San Francisco, but some lenders have begun to drift away from it because it is often out of sync with their real funding costs.

Last year, Home Savings began offering adjustable-rate mortgages tied to the Treasury bill index and began an aggressive pricing strategy to compete in the fixed-rate-mortgage arena. It also recently added FHA and VA loans.

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