WASHINGTON - The Obama administration on Monday launched a new program to aid state and local housing finance agencies in an effort to provide hundreds of thousands of affordable mortgages and develop or rehabilitate tens of thousands of rental properties.

The program, described as temporary by the U.S. Treasury, the Department of Housing and Urban Development and the Federal Housing Finance Agency, will use government-sponsored mortgage finance giants Fannie Mae (FNM.N) and Freddie Mac (FRE.N) to provide temporary financing for housing finance agencies hurt by gridlock in the credit markets. (Reporting by David Lawder)