The 2009 federal budget extends a multibillion-dollar measure intended to make it easier for consumers to find a loan for the biggest purchase they will ever make — a house.

A second measure is aimed at making it easier to buy cars, trucks and equipment.

But neither plan will put money directly into the hands of buyers: both will operate by having the government purchase loans from financial institutions, making it easier for lenders to make new loans.

The measures are aimed at addressing the credit crunch, the reluctance of lenders in some markets to make loans amid the current financial turmoil.

The measures are:

• An additional $50 billion for the Insured Mortgage Purchase Program.
• The new Canadian Secured Credit Facility, providing up to $12 billion for vehicle lenders and lessors.

The mortgage program, begun in 2008, has $75 billion committed through the current fiscal year, which ends March 31. So far, Ottawa has bought about $40 billion worth of mortgages from lenders, who are believed to have turned around and made new loans.

There is no government requirement that a lender who sells a package of home or auto loans will make new loans, but as that is the lender's business, it's expected to happen.

The new insured mortgage money will be available from April to September.

Speed up vehicle sales

The auto funding should provide a boost to car sales, said Dennis DesRosiers of DesRosiers Automotive Consultants Inc.

"The fundamental problem in the Canadian marketplace is that consumers aren't buying, and they're not buying because they can't get credit."

But the Bank of Nova Scotia called the auto loan measure "a new, relatively modest program."

Canadian vehicle sales last year totalled about 1.6 million units, off only slightly from 2007. But there was a sharp difference between the begining of the year and the end. By December, sales were down 21.2 per cent over December 2007.

Canadian Auto Workers president Ken Lewenza said backing auto-loan companies should help consumers buy more cars.

The new federal money could help the lending arms of the automakers. But to get access to the funding, they will have to agree to be regulated. They are not regulated today.

Ottawa also opened the door to letting Canada's banks get into the auto-leasing business, which they cannot do today.

"The government will consult market participants on the potential merits of changing the legislative and regulatory regime governing leasing activities by federally regulated financial institutions," the budget said.

Both programs are part of what the government calls the Extraordinary Financing Framework, $200 billion of government money designate to fill gaps in credit markets.

As well as the auto and mortgage purchases, the funding includes support for Crown corporations and lenders.

Because the money is used to buy solid assets, such as packages of mortgages, the government expects to eventually make a profit on the deals.

With files from the Canadian Press