(Bloomberg) -- Radian Group Inc. will broaden some mortgage-insurance policies to provide relief when borrowers lose their jobs, in a bid to stoke demand among homebuyers pressured by government fees and tight access to credit.

The insurer will give the coverage to buyers putting down less than 5% of the price of their homes, according to Teresa Bazemore, president of Philadelphia-based Radian’s mortgage-insurance unit.

Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs. While Radian has benefited from a decline in claims costs tied to defaults, revenue hasn’t improved as quickly. Would-be homebuyers have been thwarted by banks that are reluctant to extend credit, and the U.S regulator for Fannie Mae and Freddie Mac last week left intact some fees tied to loans they guarantee.

At Radian, “the idea was to try and get people more comfortable with entering home ownership,” Bazemore said by phone Thursday. “There’s a myth in the marketplace that people need 20% down” to be safe buying a residence, she said.

Starting May 1, the new insurance policy will pay for as many as six months of payments on new mortgages, for up to $9,000, if the borrower is fired within the first two years of their mortgage, she said. Radian is buying the coverage from another insurer, which Bazemore wouldn’t name, and giving it to borrowers at banks that join the program.

Radian is among mortgage insurers that were hobbled in the housing market crash, and Chief Executive Officer S.A. Ibrahim is seeking to rebuild the company as home prices rebound. He reached a deal last year to acquire mortgage-services provider Clayton Holdings.

The insurer climbed 1.5% to $18.38, extending its gain since Dec. 31 to about 10% after rallying 18% in 2014 and doubling each of the prior two years.

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Radian adds unemployment insurance to coax would-be homebuyers

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