The Obama administration on Monday unveiled a new program to prop up the housing market. The program will aid state and local housing agencies that provide mortgages to first-time and lower-income homebuyers and develop or rehabilitee the rental properties.

With the new program, the Treasury Department, along with mortgage finance companies Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), will purchase housing bonds issued by the finance agencies. This will provide the housing agencies fresh funds to make new loans.

The two companies will package mortgages made by the housing agencies and sell them as bonds to the Treasury Department.

The plan will help housing agencies to lend to hundreds of thousands of families and will aid in the development or rehabilitation of tens of thousands of rental units. The agencies cover all 50 states.