Freddie Mac investing in Katrina-hit areas

WASHINGTON, Oct. 13 (UPI) -- Freddy Mac, the housing finance company, plans to put $1 billion into mortgages and home-repair loans in areas damaged by Hurricane Katrina.

The move, praised by critics of the company, comes as Congress considers legislation to increase regulation of Freddie and its larger rival, Fannie Mae.

Richard Syron, Freddie Mac chairman and chief executive, and members of the Louisiana congressional delegation announced Freddie Mac's plan to buy $1 billion worth of bonds from state and local housing finance agencies.

By accepting a below-market rate of return on the bonds, the purchase will allow cut-rate financing for homeowners, The Washington Post said.

Last month, Freddie Mac was praised by another critic, Housing and Urban Development Secretary Alphonso Jackson, after the company pledged to buy up to $300 million in mortgages in hurricane-affected areas.