With the lending marketing tight and becoming even more competitive, WaMu and BofA have announced new variations on the traditional mortgage, hoping that special features will justify keeping rates slightly higher than no-frills products.

Now Credit unions are also getting into the act, offering a new version of what the Credit Union National Association (CUNA) www.cuna.org/initiatives/hlpr/index.html has dubbed the "home loan payment relief," or HLPR (pronounced "helper") loan.  

HLPR works somewhat like a hybrid ARM which usually carry a low, "teaser" rate for the first two or three years and then reset at higher, sometimes unaffordably higher, rate.   Hybrid ARMs are often cited as a cause of the spike in foreclosures this year.

Similar to a hybrid ARM, HLPR loans come with interest rates one percentage point below the national average at the time of the loan for the first three years.   But when the HLPR resets, it only goes up to the national rate average at the time of the initial loan. There are no surprises; borrowers know just how affordable their mortgage will be three years down the line when they first sign the papers.

The loan, available through CUNA via participating credit unions, is open only to middle- and lower-income home buyers; household income must be no higher than the median for the area, except in very high priced housing regions such as California - where median income can be 133 percent of the area - and Long Island, where it can be 165 percent.