A bill that authorizes a $300 billion expansion of FHA loan guarantee programs and gives the Treasury Department additional leeway to buy the debt of Fannie Mae and Freddie Mac is headed to the Senate — with the Bush administration lifting a threat to veto the bill.

The House of Representatives approved the sweeping housing bill, HR 3221, in a 272-152 vote Wednesday, agreeing to a compromise with the Senate that preserves some, but not all, of the temporary increase in the loan limits for Fannie, Freddie and the Federal Housing Administration.

The House, which had previously passed legislation that would have kept the conforming loan limit at up to $729,750 in high-cost areas, went along with the Senate’s cap of $625,500.

Congress and the Bush administration agreed to a temporary increase in the limits to help home buyers who needed jumbo loans borrow money at more affordable rates. The increase, which took effect in March, is set to expire at the end of the year.

The new caps the House and Senate propose for Fannie, Freddie and FHA fall short of the temporary cap, but exceed the previous conforming loan limit of $417,000 for Fannie and Freddie and the $362,790 cap for FHA loan guarantees in high-cost areas.

The bill sets the conforming loan limit for Fannie and Freddie, and the upper limit for FHA loan guarantee programs, at 115 percent of local area median home prices, up to the $625,500 cap.

In an effort to stem foreclosures, the bill would also allow FHA to guarantee an additional $300 billion in mortgages to help troubled borrowers refinance into more affordable mortgages when lenders agree to write down part of the principal of a loan.

To preclude a bailout of speculators, only owner-occupied homes would be eligible for the program, and borrowers who later sell their homes at a gain would have to share profits with the government.

The bill would also create a new regulator for Fannie and Freddie, boosts their existing line of credit to the government for 18 months, and gives the Secretary of the Treasury authority buy stock in the government-sponsored entities. The Congressional Budget Office estimates that if needed, government assistance to Fannie and Freddie might cost $25 billion in the next two years, although there’s a greater than even chance that a bailout won’t be needed.

Although the Bush administration had asked Congress to approve the capital backstop for Fannie and Freddie, it objected to a provision of the bill that would provide $4 billion in emergency grant funding for communities to purchase and rehabilitate foreclosed homes. The administration said Wednesday it will not carry out a previous threat to veto the bill if it contained such a provision, Reuters reported.

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