by Caitlin Kenney

The Federal Reserve and the Treasury Department are extending the TALF program to help support the credit markets. The program provides money to investors to purchase new asset-backed securities as well as commercial real-estate debt. The commercial real-estate industry and a group of lawmakers requested the extension, saying the program needed more time to get going.

Bloomberg reports:

Commercial property values have fallen 35 percent since peaking in October 2007, according to Moody's Investors Service. The extension may help firms such as Vornado Realty Trust, which is considering the sale of commercial MBS through the TALF. Almost $165 billion of mortgages for skyscrapers, shopping malls and hotels are due this year.

While financial-market conditions "have improved considerably in recent months," the markets for ABS and CMBS "are still impaired and seem likely to remain so for some time," the Fed and Treasury said.

The Fed says loans for newly issued commercial mortgage backed securities have been extended through June 30, 2010 because "new CMBS deals can take a significant amount of time to arrange." Loans for other asset backed securities and CMBS sold before Jan.1 have been extended three months to March 31.