WASHINGTON (AP) — A federal agency says it is easing rules for troubled borrowers to lower their monthly mortgage payments on loans backed by Fannie Mae or Freddie Mac.

The Federal Housing Finance Agency, which oversees the two government-controlled lenders, says borrowers who are at least 90 days delinquent on their mortgages won't have to submit financial documents to qualify for a permanent loan modification if they make three on-time payments.

Borrowers may receive more favorable terms on their mortgages if they choose to provide the documents.

The agency says the program should help borrowers lower their payments and avoid foreclosure. It takes effect July 1.

Fannie and Freddie together own or guarantee about half of all U.S. mortgages, or about 31 million home loans.