WASHINGTON — In a program patterned after a Federal Home Loan Bank of San Francisco pilot earlier this year, the Federal Housing Finance Board proposed allowing the Federal Home Loan Banks to expand their Affordable Housing Program homeownership set-aside programs.

The expansion would cover the refinancing or restructuring of low- and moderate-income subprime or nontraditional loans held by bank members or their affiliates and would expire at the end of June 2011. Comments are now being accepted on the proposal, which would allow a bank to set aside the greater of $4.5 million or 35% of its AHP contribution for all homeownership set asides, including the refinancing or restructuring option.

The FHFB estimated that the new authority would allow the banks to provide almost $75 million to assist some 7,500 households facing foreclosure. Eligible loans for the program would have to be originated before July 7, 2007. The program would require that refinanced loans must be 30-year fixed rate, with a maximum loan-to-value ratio of 97% of new appraisals.