copyright 2009, The Washington Post WASHINGTON -- The Obama administration is close to rolling out two initiatives aimed at addressing lingering problems from the financial crisis: A long-delayed effort to cleanse financial firms of their toxic assets, and a $35 billion plan to prop up state programs that help lower-income borrowers get affordable mortgages. Announcements on both fronts could be made as early as Wednesday. The toxic asset program is launching nearly a year after Congress approved the $700 billion financial rescue legislation that bore the name Troubled Assets Relief Program. The initiative was once envisioned as the signature program in the government's rescue of the banking system, but financial firms grew wary of the strings attached, and it was subsequently scaled back as the crisis abated. Since July, the Treasury Department has been working with a group of private firms to build investment funds that would combine public and private resources to buy troubled bank securities. The firms plan to buy the assets at bargain prices in hopes that they will turn profitable over time. This week, the first round of financing from the Treasury is slated to go out the door, sources familiar with the program said. The department plans to commit more than $2.5 billion to match dollar-for-dollar what has been raised by the private firms, the sources said. The investment funds can then borrow another $5 billion from the Treasury in a form of leverage intended to provide a further incentive to the private firms. The total size of the program is expected to eventually reach $40 billion and can be expanded if needed, administration officials have said. Another initiative will attempt to aid the fragile housing market by assisting state programs aimed at getting more low-and-moderate income or first-time borrowers into homes. The proposal calls for the purchase of as much as $20 billion in bonds from state and local housing finance agencies and $15 billion in additional forms of liquidity, according to sources familiar with the plan. These agencies typically help about 100,000 borrowers a year and fund their operations by selling tax-exempt bonds, according to the National Council of State Housing Agencies. But the market has shrunk as investors shy away from the housing market. Several states have been forced to curtail their lending programs, according to the agency association. The housing program would be funded through the Housing and Economic Recovery Act of 2008, which put mortgage financing agencies Fannie Mae and Freddie Mac under government control. Treasury Secretary Timothy Geithner has not signed off on the plan and the details could change, according to sources familiar with the plan. The sources spoke on the condition of anonymity because the details have not been finalized. A Treasury spokesman declined to comment. The housing plan, which surfaced in media reports on Monday, is the administration's latest attempt to provide relief to the housing market, which is struggling to stage a recovery. After rising for four months, sales of existing home dipped last month. And economists worry that the Nov. 30 expiration of an $8,000 tax credit for first-time home buyers could put a damper on the market. Financing through state housing agencies fell out of favor during the housing boom when the many low-income homeowners could easily get a subprime loan, said Guy Cecala, publisher of Inside Mortgage Finance. The programs also could be cumbersome for borrowers, requiring them to get pre-purchase counseling, for example. But 'in the current environment, it's a real popular program again. Some offer no down payment loans' through a variety of programs, he said. 