The state Realtors group launched a $1 million mortgage protection plan on Thursday to help first-time buyers if they lose their jobs.

The California Association of Realtors will use the money to buy insurance policies that first-time buyers can apply for when they enter escrow.

If the buyer eventually loses his or her job, the policy will provide $1,500 a month in mortgage payment assistance for a maximum of six months. If there is a co-buyer involved, the benefit is increased by $750.

Coverage for accidental disability and a $10,000 death benefit are also included.

The program, to be financed by the association's Housing Affordability Fund, is expected to help between 2,000 and 3,000 households in the first year.

CAR's plan is similar to those initiated by the automotive industry to stimulate sales, and the same result is likely for the state's housing market.

"People are very concerned now they might lose a job, so this is one way of providing them some peace of mind," said Joel Singer, the association's executive vice president.

Applications are available on the association's Web site at www.car.org.

The recession and record foreclosures have pushed

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California housing prices down to levels last seen in 2002 and 2003. During the fourth quarter of last year, 59 percent of first-time buyers could qualify for an entry-level home costing $248,030, according to the association.

The qualifying annual income level was $48,900 and the monthly payment, including taxes and insurance, would be $1,630.

"A lot of people making that kind of money are still renting," said Nancy D. Sidhu, chief economist at the Los Angeles County Economic Development Corp.

"On the other hand, this is exactly the group that feels threatened by the current economy."

The Realtors' protection plan may give people who were thinking about buying a house the confidence to go ahead with the purchase, Sidhu said.

"It takes a certain amount of courage under current circumstances to buy a big ticket item, and a home is about the biggest ticket anybody has in mind," she said.

Jim Link, executive vice president of the Van Nuys-based Southland Regional Association of Realtors, said that the program should have a positive impact in the marketplace.

"I think its going to be fairly effective in helping people who are concerned about their mortgage and their employment," he said.