Housing bill clears hurdle, vote seen Saturday

Greg Ohme works on framing a house in North Aurora, Illinois during the worst housing slump in decades July 24, 2008. REUTERS/Jeff Haynes

WASHINGTON (Reuters) - The U.S. Senate voted on Friday to limit debate on a bill aimed at shoring up both the housing market and mortgage finance companies Fannie Mae and Freddie Mac, paving the way for a final vote expected on Saturday.

Earlier this week, the White House lifted a threat to veto the measure, which has already passed the U.S. House of Representatives. The bill includes provisions for the Treasury Department to offer Fannie and Freddie a bigger line of credit and buy stakes in the companies, if needed.

Lawmakers have moved with uncommon speed since Treasury Secretary Henry Paulson asked for the emergency measures to bolster confidence in the two biggest sources of U.S. housing finance on July 13. The Senate’s 80-13 vote to limit debate starts the clock ticking toward a final vote.

In addition to the throwing a lifeline to Fannie and Freddie, the sweeping legislation would authorize the Federal Housing Administration to refinance $300 billion of failing mortgages and provide communities hard-hit by home foreclosures with about $4 billion in federal aid.

The proposal also contains fresh tax incentives for prospective home buyers and bond investors to help put a floor under a housing market devastated by record foreclosures left in the wake of a multi-year boom.

Paulson has said the bill would send a critical message of confidence to financial markets.

Reporting by Richard Cowan and Patrick Rucker; Editing by Andrea Ricci