The 272-152 vote reflected a congressional push to send election-year help to struggling borrowers and reassuring jittery financial markets about the health of two pillars of the mortgage market.

The measure is on track to pass the Senate and become law within days, after President George W. Bush dropped his opposition.

The White House swallowed its distaste for US$3.9 billion in grants the bill would provide for devastated neighborhoods, in exchange for a measure to rein in Fannie Mae and Freddie Mac, the government-sponsored mortgage firms, and the power to throw them a financial lifeline. Foreigners have millions of dollars invested in the two quasi-government agencies.

The administration and lawmakers in both parties teamed to negotiate the measure, which also accomplishes top Democratic priorities, including federal help for homeowners, a new permanent affordable housing fund financed by Fannie and Freddie, and the US$3.9 billion for hard-hit neighborhoods. The grants are for buying and fixing up foreclosed properties.

Treasury Secretary Henry M. Paulson and lawmakers in both parties negotiated the final deal. It accomplishes several Democratic priorities, including aid for homeowners, a permanent affordable housing fund financed by the two mortgage companies and the money for hard-hit neighborhoods. The grants are for buying and fixing up foreclosed properties.

“It is the product of a very significant set of compromises,” said Rep. Barney Frank, chairman of the House Financial Services Committee. “We are dealing with the consequences of bad decisions and inaction and malfeasance from years before,” said Frank, D-Mass.

Paulson said he would push for enactment of the bill by week’s end. Despite disappointment with some items rejected, he said “portions of this bill are orders of magnitude more important to turning the corner on the housing correction and supporting our markets and our economy.”

In a policy statement on the bill, the White House said that parts of it “are too important to the stability of our nation’s housing market, financial system, and the broader economy not to be enacted immediately.”

The measure hands the Treasury Department the power to extend the government-sponsored mortgage companies an unlimited line of credit and to buy an unspecified amount of their stock, if necessary, to prop up congressionally chartered Fannie Mae and Freddie Mac. The firms back or own US$5 trillion in U.S. mortgages, almost half the nation’s total.

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