Under pressure from regulators to help mop up the subprime mortgage mess, Freddie Mac announced on Wednesday that it has committed to buy up to $20 billion in loans to help borrowers who might otherwise default on their payments.

The government-sponsored entity is the second-largest source of funds for home loans, behind its sister organization, Fannie Mae. The news from Freddie Mac came a day after legislators on the House Financial Services Committee called on the two lenders to aid homeowners with poor credit.

Freddie Mac C.E.O. Richard Syron made the announcement at a housing market summit on Capitol Hill led by Senator Christopher Dodd, a Democrat from Connecticut. Syron said that the new loan products will be available by July but that the details of the program still need to be approved by Freddie Mac's regulator.

The plan is to provide people with poor credit the opportunity to refinance their mortgages under more favorable terms. Freddie Mac will offer fixed-rate as well as longer-term adjustable-rate mortgages. In an interview with Bloomberg News, Syron said he would pursue the program for two to five years.

Fannie Mae is also working on new products to aid distressed borrowers, C.E.O. Daniel Mudd said at the hearing on Tuesday. One program lets lenders extend the terms of loans to 40 years from the current maximum 30-year term.

Fannie and Freddie were created by Congress to buy home loans from banks and then sell them as securities in the secondary market. The process was designed to keep interest rates as low as possible and to free banks from the credit risk that might otherwise prevent them from continuing to issue loans.

The Mortgage Bankers Association applauded the news that the two lenders would step up and help. "I commend Fannie Mae and Freddie Mac for their leadership in helping to find solutions to help stranded subprime borrowers," its chairman John Robbins said in a statement. He said his organization will continue working with all the players in the public and private sector to solve the problem.