The Bush administration is expanding a federal mortgage insurance program to allow as many as 100,000 borrowers at risk of foreclosure to keep their homes.

Borrowers who are as much as three months behind on their mortgages, have damaged credit histories, and owe more than their homes are worth will now be eligible to refinance with a federally insured loan, the assistant secretary of the U.S. Housing and Urban Development Department, Brian Montgomery, said yesterday.

The administration is trying to curb foreclosures, which jumped 60% in the past year and has contributed to a drop in consumer spending and economic growth. In relaxing the rules to help delinquent homeowners with zero to negative equity, the Federal Housing Administration is agreeing to make good on the mortgages that lenders write for the program should they default.

“We risk transferring this default risk right onto the backs of taxpayers,” Representative Edward Royce, a Republican from California, said in an interview with Bloomberg Television. “I think we’re headed down the wrong road.”

Lenders, more than 100 of which have shut down or curtailed loans because of rising mortgage delinquencies, would fare better with this plan than under Democratic proposals requiring the industry to absorb more losses, according to an analyst from Credit Suisse, Moshe Orenbuch, in New York.

The plan gives lenders “some hope of a more full recovery,” Mr. Orenbuch said in an interview. “If the borrower’s situation improves down the road, you have a legal claim to it.”

The changes don’t require approval from Congress.

Under the program, FHA will insure loans with negative equity if lenders are willing to write down the loan balance so there is at least 3% equity for borrowers with two months of delinquencies and 10% for borrowers with three months of late payments within the previous year.

The administration is trying to find a balance between protecting homeowners who “played by the rules” without allowing banks to dump bad loans on taxpayers, Montgomery told the House Financial Services Committee in Washington.

“We must not federalize the housing market,” Mr. Montgomery said. “And we must not harm our economy through solutions that, however well intentioned, further erode the foundation of the nation’s housing market, hurt homeowners who are meeting their mortgage obligations, or prolong the correction.”