WASHINGTON (AP) - President Barack Obama is proposing a program to allow homeowners with privately held mortgages to refinance at lower interest rates.

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The program would cover both loans issued by government-controlled mortgage giants Fannie Mae and Freddie Mac and private mortgage lenders. Congress would have to approve, a difficult hurdle.

Obama announced the plan, his latest of several housing initiatives, in his State of the Union speech.

A punctured housing bubble was at the center of the recession, prompting widespread foreclosures and leaving millions of homeowners with houses valued at less than their mortgages.

Under the plan, any homeowner current on his or her mortgage could take advantage of lending rates now at 4 percent or below. Administration officials offered few details but estimated savings at $3,000 a year for average borrowers.