The House of Representatives approved a bill to create a $300 billion mortgage-insurance fund and provide billions more in homeowner aid to stabilize a housing market shaken by foreclosures and a credit crunch.
The bill would also offer a $7,500 tax credit for first-time home buyers. A separate measure passed on Thursday would send $15 billion to local communities hit hard by the mortgage crisis to help them buy and fix abandoned homes. The mortgage insurance fund, which would be overseen by the Federal Housing Administration, is expected to help 500,000 borrowers whose homes have dropped in value since they took out their mortgage. Under the program, lenders could get an FHA guarantee on the loan if they wrote down the principal amount.
The plan to retool the FHA was passed by a vote of 266 to 155 and notably drew the support of 39 Republican lawmakers. The measure to extend a tax credit to first-time home buyers was passed by a margin of 322 to 94, also winning the support of many Republicans.
While President George W. Bush has threatened to veto the sweeping bill drafted by Democrats, the White House has said it supports some provisions and has left the door open for a compromise.
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