WASHINGTON — The Federal Housing Administration told lawmakers last week that it has taken significant steps to make sure that the HOPE for Homeowners Program is up and running by its Oct. 1 implementation date but warned that loans granted under the program would carry higher interest rates.

FHA Commissioner Brian Montgomery told the House Financial Services Committee that loans under the new program are likely to have a higher interest rate than other FHA-insured products given the distressed nature of the borrowers likely to participate in the program as well as the one-and-a-half percentage point mortgage insurance premium mandated for the loans. Because this raises concerns about affordability, the loans will have a lower monthly payment than the mortgage it replaces, Montgomery said.

Acknowledging that developing underwriting standards for a population of distressed homeowners is a challenge, Montgomery told the committee that the board will be adopting documentation requirements to ensure that borrowers have a reasonable ability to repay the new FHA-insured mortgage.