The US Treasury's conservatorship of Fannie Mae and Freddie Mac and its drive to reduce mortgage rates will come as welcome news for prospective US homebuyers in need of mortgage financing.

A government takeover of the two giant mortgage financiers is intended to ensure that mortgages remain available even as private sources of capital have dried up in the credit crunch. In the short-term, however, analysts say it may be difficult for the Treasury to bring mortgage rates down.