The United States unveiled on Monday a new plan to boost the beleaguered housing market, helping support low mortgage rates and expanding resources for cash strapped borrowers to own or rent homes.

The two-pronged plan will involve a bond purchase program to support new lending by housing finance agencies and a temporary credit and liquidity program for the agencies to finance outstanding bonds.

"This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times," said Treasury Secretary Timothy Geithner.

"Through the years, many low and moderate income Americans have been well served by state and local HFAs (housing finance agencies), but the housing downturn has hit these organizations too," he said.

Through the new initiative, he said, President Barack Obama's administration aimed to help the agencies "jumpstart new lending" to borrowers and better support financing costs of their current programs -- "key components in stabilizing the housing market overall."

The cost of the new initiative is not immediately available but the government said in a statement that the plan would provide "hundreds of thousands of affordable mortgages for working families and enable the development and rehabilitation of tens of thousands of affordable rental properties.

"It will do this at little or no cost to the taxpayer because it is paid for by the HFAs themselves and, as a temporary program, it incentivizes HFAs to transition back to market sources of capital as quickly as possible," said the statement issued by the Treasury and two government housing-related agencies.

The new plan is expected to be launched next month, Treasury deputy assistant secretary Michael Barr said.

The program is an offshoot of legislation passed by lawmakers last year to cushion the collapse of the housing industry, epicenter of a financial crisis that dragged the United States into its worst recession in decades.

The government move Monday to help the housing market came ahead of the expiration next month of a 8,000 dollar tax credit for first-time home buyers, part of various programs costing billions of dollars to rescue the troubled housing market.

Lawmakers from both Obama's Democratic party and the Republicans party are keen for an extension of the tax credit which if approved would further increase the ballooning federal government deficit.

Barr said it was "still too early to say" when the authorities could begin unwinding housing support programs.

Officials said Friday the government budget deficit shot to a record $1.417-trillion in the 2009 financial year that ended September.