The House of Representatives approved legislation Wednesday that would siphon off up to $1 billion a year from Fannie Mae, Freddie Mac and the Federal Housing Administration to build affordable rental housing and provide down-payment assistance for first-time home buyers.

Supporters of HR 2895, the National Affordable Housing Trust Fund Act of 2007, say it would be the largest expansion in federal housing programs in decades — providing $800 million to $1 billion a year to build, rehabilitate or preserve 1.5 million units of rental housing over the next decade.

“It has been 17 years since the federal government last enacted a major affordable-housing production program,” said Rep. Maxine Waters, D-Calif., in a statement. Waters said HR 2895 would “tackle the full range of housing crises, providing relief to overburdened renters and homeowners while targeting funds where the need is greatest.”

House lawmakers approved the bill in a 264 to 148 vote, but it relies on other legislation for funding and is opposed by the Bush administration.

The Bush administration’s opposition to the bill stems from its reliance on projected surpluses from FHA loan-guarantee programs, and a proposed affordable-housing fund that would be fed by revenue from government-sponsored mortgage repurchasers Fannie Mae and Freddie Mac.

HR 1427, a bill approved by the House in May to strengthen regulatory oversight of Fannie and Freddie, would require the government-sponsored entities (GSEs) to contribute an amount equal to 1.2 basis points of their outstanding mortgages to the affordable-housing fund.

Another bill, HR 1852, is intended to modernize FHA loan programs by allowing risk-based premiums, zero-down loans and increased loan limits in high-cost areas.

FHA has estimated that the modernization bill, approved by the House on Sept. 18, could generate an extra $342 million in revenue in 2008 — as opposed to a $143 million taxpayer subsidy without changes to its loan-guarantee programs. The National Affordable Housing Trust Fund would use some of that revenue for affordable housing.

HUD Assistant Secretary Brian Montgomery told members of the House Financial Services Committee this summer that diverting revenue from FHA programs would be like “robbing Peter to pay Paul,” and could pressure FHA administrators to hit revenue targets.

The Bush administration also objects to tapping Fannie and Freddie for an affordable-housing fund, saying that could create pressure for unrestrained growth of the GSEs’ loan portfolios. Democrats have called on the administration to raise the $1.4 trillion cap on the GSEs’ loan portfolios.

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