President Bush on Wednesday reversed his stance and moved to back a congressional plan to help Fannie Mae and Freddie Mac weather the mortgage crisis and to provide struggling homeowners with more affordable loans.
White House press secretary Dana Perino said the president had decided it was not the time for a veto fight and would support the bill. The House was expected to vote on it Wednesday.
The bill would let the Treasury Department extend a line of credit to government-backed mortgage giants Fannie and Freddie and buy their stock. Officials say stabilizing the two institutions, which hold or back about half of the nation's mortgages, is critical for restoring confidence in the U.S. housing market.
The bill also would allow homeowners to refinance their mortgages with lower-rate, government-backed loans. It would provide $3.9 billion to help communities buy and rehabilitate foreclosed properties.
Treasury Secretary Henry Paulson said Wednesday that while the bill contains some "wasteful" provisions, it is nonetheless key to helping the nation turn the corner on the housing crisis.
"This is a very important message that we are sending to investors around the world," Paulson said.
Congressional analysts estimated Tuesday that the Fannie and Freddie rescue could cost $25 billion but that there's a better than even chance that it won't be needed at all.
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