President Barack Obama on Wednesday signed legislation to help low- and moderate-income Americans refinance their mortgages.
The measure, signed by the president, provides $500 million to help eligible borrowers who make below a certain amount to refinance a $250,000 loan or a $200,000 line of credit.
The Obama administration says the loans can be extended for up to six years.
The loans have to be repaid within a year, but borrowers can defer payment by paying the difference.
The program will not be available to low- or moderate-earners, the president’s office said.
It was the second such initiative to help lower-income borrowers with mortgage-backed securities, after the Department of Housing and Urban Development (HUD) announced last month it would allow people to refinish loans on the government’s mortgage-bond market.
The Department of Labor announced last week it will allow low- to moderate-wage workers to refinquish their loans.
Obama’s signing comes as his administration seeks to boost its domestic manufacturing output and boost wages for the middle class, amid signs the U.S. economy is slowing.
The president also announced the creation of an infrastructure fund to pay for roads, bridges and other infrastructure projects, as well as a $400 billion package of federal stimulus spending.