Preston Martin, the former chairman of the Federal Home Loan Bank Board, has started a new California-based mortgage investment company.

The new company, PMI Mortgage Corp. of San Francisco, will issue certificates of particpation in home mortgages to pension funds, life insurance companies, bank trusts and anyone else able to invest a minimum of $25,000.

Martin is chairman of PMI of Mortgage Insurance Corp., which insures the upper end of private mortgages for lending institutions. He said the minimum $25,000 investment for certificates from the new company was an attempt to avoid attracting deposits from savings and loan associations, which make the majority of the nation's private mortgage loans.

He said the private mortgage endeavor would be a similar to the Federal Home Loan Mortgage Corp., a subsidiary of the FHLBB that also sells certificates of participation in existing mortgages.

Martin said the new PMI firm plans to operate on a spread of appoximately 0.4 percent between the rates paid on the mortgages and the return to buyers of the certificates of participation for long term investments.

PMI Mortgage Insurance Corp. is a subsidiary of Allstate Insurance Co., and PMI Mortgage Corp. is a subsidiary of Allstate Enterprises. PMI Mortgage Insurance Corp., which Martin foundedfive years ago, has 32 branches, including one in the Washington area.