A rule has been published by the housing and urban development department that the offerings of FHA adjustable- rate mortgages (ARM) will be expanded. Those who want to buy new homes can choose ARMs over a period of their choice ranging from one to ten years at a fixed interest rate. This was only offered for a period of one year at a fixed rate earlier. This program was launched by the President Bush so that the families that do not own a home can make their purchase. This was basically done in the interest of minority families.

The secretary of HUD said that President is trying hard for the minorities to have their homes. Whereas this step will jointly benefit the minorities and Americans as well who could not buy their own home in the past due to some financial reasons.

The rule states that the borrower has to pay an interest at a fixed rate for a period of 1,3 and 5 years and Arm will not change by anything more than 1 percent per year. This is applicable after the period of fixed payment is over and the maximum limit is 5 percent and this is for the remaining life of the loan. If the loan is of 7 and 10 years long then the percentage is 2 percent and 6 percent for the life. It is estimated that nearly forty thousand families would benefit from this scheme.

However, there are also other features of this program, which are as under:

There would not be any need to pay down payment for buying a home in this program. About 150,000 families are estimated to seek the help of this program to make their dream come true.

The American initiative for providing homes without down payment will provide about $200 million to these forty thousand families every year.

The affordable homes will be sanctioned by single-family tax credit.

The plan further targets to provide insurance to these low income families that are mostly set back by the high interest rates from the private lenders.

The amount is expected to be raised to $45 million in FY 2005 for this program. This is to educate these suffering families to get their housing loans at low rates and escape the hands of private lenders.

Additional information about this program can be obtained from espanol.hud.gov. and www.hud.gov