U.S. Democratic presidential candidate Sen. John Kerry said he would expand the low-income housing focus of mortgage finance companies Fannie Mae and Freddie Mac, but would preserve their government-sponsored status.

"The United States has the deepest, most liquid mortgage markets in the world. Despite a number of crises in international capital markets over the past several years, there has never been a lack of mortgage credit, thanks in large part because of the role played by the government-sponsored enterprises," the Massachusetts Democrat said in response to questions published on Monday on the the National Association of Home Builders' Web site: http://www.nbnnews.com/NBN/issues/2004-08-30/lead.html

"We must also increase the focus of GSEs on affordable housing," Kerry said.

President George W. Bush has proposed expanding affordable housing goals for Fannie Mae and Freddie Mac.

Kerry also said he backs the special status the privately owned but congressionally chartered companies enjoy. Those remarks signal a warmer embrace of the government-sponsored enterprises than the Bush administration, which has questioned some of those benefits as part of the debate over strengthening supervision of the companies that followed revelations of an accounting scandal at Freddie Mac last year.

Administration officials rejected legislation aimed at strengthening oversight of the companies, saying it lacked key tools to rein in the companies.

Kerry, in his first direct public comments about the enterprises, said he would work with Congress and "top experts" to supervise the companies more closely. But he also said the companies' charters should be preserved because of the roles they play in supporting housing markets.

"Housing holds a special place in both our economic and social policy in this country," he said.

Congress grants Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) privileges that include the ability to seek emergency loans of up to $2.25 billion each from the government in a crisis and some tax and disclosure exemptions.

Bush, in remarks on the home builders Web site, also praised the companies, as well as the Federal Home Loan Banks, for their part in the U.S. housing system, but urged reform.

"They are in need, however, of a regulatory structure that is worthy of their considerable size, complexity and importance. And they must remain focused on their special public mission," Bush said.

He told the home builders that he wants a new regulator for the companies to be able to review both new and existing activities by the companies, set capital requirements for them and be able to shut down a failed company

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