UPDATE 7-Senators say have accord on US housing rescue

(Recasts, rewrites throughout; adds background)

By Patrick Rucker and Kevin Drawbaugh

WASHINGTON, May 15 (Reuters) - Leaders of the U.S. Senate Banking Committee said on Thursday they have agreed to the underpinnings of a housing rescue plan that will create a federal backstop for failing loans.

"We feel very optimistic we can have a very significant bill, a bipartisan bill, to present to the rest of our colleagues on the floor of the United States Senate," committee Chairman Christopher Dodd told reporters Thursday evening after a full day of negotiations.

The plan would create a $300 billion mortgage insurance fund administered by the Federal Housing Administration and a new regulator for Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the two largest U.S. sources of mortgage finance.

Under a deal hammered out on Thursday, Fannie Mae and Freddie Mac will partly finance the mortgage insurance program through contributions to a new affordable housing fund, industry sources close to the talks said.

Late Thursday, Dodd said he would reconvene the banking panel on Tuesday to finish its work on the bill.

The Congressional Budget Office in a report estimated the fund would cost $1.7 billion and finance up to 500,000 loans worth $85 billion. The independent agency said it does not expect the fund to insure the $300 billion worth of loans that lawmakers would authorize.

Since last spring, the nation's mortgage market has been shaken by sinking home values that have erased billions of dollars of investor wealth. An estimated 2 million foreclosures are forecast for this year.