The Obama administration is preparing to announce that it will provide $35 billion to help state and local housing finance agencies, many of which were hit hard by the economic crisis and forced to curtail or suspend tax-exempt bond programs that allow them to provide affordable mortgages. But the window for $20 billion of the assistance may close by the end of the year.

Under the program, which could be announced as early as today, the Treasury Department would create a market for tax-exempt multifamily and single-family HFA bonds by purchasing up to $20 billion of them through government-sponsored enterprises Fannie Mae and Freddie Mac.

The administration also would provide up to $15 billion of liquidity to help HFAs remarket their variable-rate debt obligations.

However, the Treasury Department's lawyers have been insisting that any HFA bonds the Treasury purchases through the GSEs be issued by Dec. 31, 2009, the sunset date for the department's authority to buy securities from the GSEs under the Housing and Economic Recovery Act of 2008.

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