Mortgage finance giant Freddie Mac said Tuesday it will no longer buy high-risk home mortgages that it deems to be highly vulnerable to foreclosure, in a surprise move that came amid a deteriorating market for subprime loans affected by slumping home prices and rising interest rates

The government-sponsored company, which is the second-biggest financer of home loans in the United States, said it will begin using stricter standards for mortgages that it buys — including limiting the use of loans requiring less documentation of the borrower’s status than conventional mortgages.

“The steps we are taking today will provide more protection to consumers and enhance the level of underwriting standards in the market,” Richard Syron, Freddie Mac’s chairman and CEO, said in a statement.

The changes will take effect Sept. 1, the company said, to avoid disrupting the mortgage market.

The company’s new standards cover certain types of hybrid adjustable-rate mortgages that comprise about three-quarters of the subprime market. An adjustable-rate mortgage is considered a higher-risk loan because it typically draws borrowers in with an initial low, or “teaser” rate, which can rise substantially over time.

Home-mortgage delinquencies and foreclosures are surging, especially for people who took out subprime mortgages — higher-interest loans for those with blemished credit records or low incomes who are considered higher risks — during the sizzling housing boom that waned in the latter half of 2005.

Write-offs of home mortgage loans by banks and thrifts reached a three-year high in the fourth quarter last year, according to the Federal Deposit Insurance Corp. And several financial companies that specialize in subprime mortgages have seen their shares plummet in recent weeks and the industry sector has been roiled.

Low-documentation, interest-only and other nontraditional mortgages, which are riskier than conventional home loans, have exploded in popularity in recent years and raised concern about defaults if borrowers cannot meet rising mortgage payments.

McLean, Va.-based Freddie Mac, like its larger government-sponsored sibling Fannie Mae, was created by Congress to pump money into the mortgage market by buying home loans from banks and other lenders, in order to keep interest rates low and make home ownership affordable for low- and moderate-income people. The two companies bundle the mortgages into securities for sale on Wall Street.

Freddie Mac shares fell 22 cents to $64.71 in morning trdaing on the New York Stock Exchange.

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On the Net:

Freddie Mac: http://www.freddiemac.com

Fannie Mae: http://www.fanniemae.com