WASHINGTON -- Henry Cisneros, secretary of Housing and Urban Development, unveiled on Monday the administration's plan to convert the Federal Housing Administration into a government-owned corporation.

If approved by Congress, the administration's plan would preserve the agency's current mission of individually insuring home loans to low- and moderate-income Americans. But the program would operate under a new, more businesslike structure.

"We expect that the FHA will be a leaner entity -- swifter in its response to the marketplace," Mr. Cisneros told reporters.

"It is not possible [at present], in too many instances, to respond with the rapidity the market requires," Mr. Cisneros said.

Under the new structure, the FHA would be able to hire the financial, insurance, and technology experts it needs, and function like a "modern, competitive insurance company," Mr. Cisneros said.

The FHA will also undertake new programs that would allow it to share the risk for some home loans with private mortgage insurers and the government-backed secondary market agencies, Fannie Mae and Freddie Mac, according to HUD officials.

The risk-sharing programs will be only a small part of FHA's business at first, but federal housing commissioner Nicolas P. Retsinas suggested those programs would grow.

"Certainly in the short term we need to keep doing what we are doing. We can't stop midstream," Mr. Retsinas said.

"[But] over time, partnerships with a variety of different actors will be part of our future," he said.

Monday's announcement suggested that HUD had beaten back opposition within the administration to a broad mandate for the FHA.

In a quest for a leaner bureaucracy, the Office of Management and Budget had proposed a far more radical reorganization.

The budget office proposed that the FHA become a smaller agency that partially insures loans only to the highest-risk borrowers whom the private market cannot serve on its own. A similar proposal was made last spring by Rep. John Kasich, R-Ohio, soon to be the chairman of the House Budget Committee.

Mr. Cisneros appeared to be addressing those critics on Monday when he said, "There are those who would argue [for the] elimination of FHA completely."

"We believe there's an important place for the federal government in housing policy," Mr. Cisneros said. The FHA "will remain the major force in American housing policy," he added.

But key Republican aides to the banking committees in the Senate and House said that Republicans in Congress would vigorously debate the future role of the FHA.

"Private industry is saying FHA is competing with them. That's a problem, because you got the private sector lobbying against [the FHA]," said a Republican aide to the House Banking Committee.

The aide added that the lack of details in HUD's own proposal Monday suggests that the administration continues to be divided internally over its vision of the FHA's future.

Pressed for details, Mr. Retsinas said, "I don't know what the marketplace will look [like] five years from now."

"I want to make sure that we have the capacity to fill the gaps in that marketplace ... whether [by] pool insurance or direct insurance."

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