When we first met Steve Larson of Seattle last week, he was ready to buy his first home due to a sharp reduction in mortgage interest rates.

"Lower payment, so, it's time to buy it now," said Larson.

But now, he may want to hold off on that major purchase. That's because the government is considering a plan that would drastically cut mortgage interest rates.

Donna Ziak is a mortgage counselor for Solid Ground, a non-profit housing agency in Seattle.

"It really puts home ownership in reach for a lot of working, middle class families that up to now have been pretty much shut out," said Ziak.

The proposal by the Federal Treasury is to pump billions of dollars into mortgage-backed securities held by Fannie Mae and Freddy Mack.

That would lower the rate on a 30-year mortgage to an astoundingly low 4.5 percent.

No one is sure about the cost, but it could reach $350 billion.

But there could be limits as well: Perhaps the rate would apply only to new mortgages, not refinancing current ones, and it wouldn't help the 2.25 million homeowners who have lost their homes to foreclosure this year.

It could also put people like Steve Larson back on the housing sideline, waiting for a better deal that may not come for months. That could hurt everyone from real estate agents to those who need to sell their homes soon.

But not everyone agrees. Michaelle Crovisier of Seattle has been in real estate for more than two decades. She says even talk of the Treasury proposal has energized the local housing market.

"Probably now's a really good time to get in the market and we do see smart people are buying now," said Crovisier.

Solid Ground offers a free packet of helpful information concerning mortgages, financial help and how to deal with foreclosure.