(Recasts, adds analyst comment)

By Nancy Leinfuss and Al Yoon

NEW YORK, Nov 9 (Reuters) - U.S. mall owner Developers Diversified Realty Corp. plans to break the commercial mortgage bond market's silence of nearly a year and a half, with help from an emergency Federal Reserve lending program, investors said.

The $400 million deal will be the first to be sold under the Fed's Term Asset-Backed Securities Loan Facility, known as TALF, which aims to lower funding costs in the sector by offering investors funding for the assets.

The deal will be widely watched in the $700 billion market for commercial mortgage-backed securities, which became key funding for office, retail and apartment buildings during the real estate boom.

But CMBS became among the worst hit bonds in 2008, and in May the Fed threw the battered sector a lifeline by including them in its program that reignited lending in consumer-related debt such as auto loans and credit cards.

With funding severely crimped, borrowers with maturing loans have been pleading for extensions of existing terms or face default.

Laying the groundwork has been difficult for Cleveland, Ohio-based Developers Diversified (DDR.N: Quote, Profile, Research) and other borrowers trying to use the TALF progam, the investors said.

But it could be an important stepping stone in a market seen by central bankers as one of the biggest risks to the fragile U.S. economic recovery. The market has suffered badly as the deep recession severely cut the rent revenue needed to pay debt service on the bonds.