WASHINGTON - The sweeping housing bill that the House passed Wednesday will give the White House the power to bolster troubled mortgage giants Fannie Mae and Freddie Mac.

But the bill, which President Bush could sign as early as this week, will provide only modest benefits for home buyers or for borrowers facing foreclosure.

After months of negotiations between House and Senate lawmakers and the Treasury Department, Bush dropped his opposition Wednesday to a provision for $3.9 billion in grants for devastated neighborhoods.

The legislation, aimed at helping 400,000 strapped homeowners avoid foreclosure and to prevent Fannie and Freddie from collapsing, quickly passed the House in a 272-152 vote. The measure is on track to pass the Senate and become law within days.

Although the bill was widely praised by real estate industry groups, doubts remain about how much real-world impact it will have for consumers.

"This isn't going to be the catalyst for a better housing market," said Mark Zandi, chief economist at Moody's Economy.com. "It may staunch some of the downturn, but it's going to have a very modest positive impact."

For homeowners and home buyers, the bill includes:

* $300 billion to provide more affordable mortgages to troubled homeowners.

* a $7,500 tax credit for first-time home buyers.

But plenty of first-time buyers won't get help.

The tax break applies only for homeowners who purchase between April 9, 2008 and July 1, 2009. The full amount of the credit also is available only for individuals with incomes under $75,000 or couples earning less than $150,000.

Moreover, it will have to be paid back, interest-free, over 15 years.

Cash-strapped homeowners -- defined as those who are spending more than 31 percent of their income on their house payment -- may qualify for a new, more affordable loan backed by the Federal Housing Administration under the bill.

Lenders, however, would have to agree to take a loss on the existing loans and would walk away with at least some payoff and avoid the costly foreclosure process. Lender participation is voluntary.

"The industry really has to step up and use it," said Bruce Dorpalen, director of housing counseling for Acorn Housing Corp.

In addition, home buyers who purchase a property with an FHA loan will no longer be able to receive financial assistance from the sellers. The bill closes a loophole that let sellers channel money to buyers through charities.

While critics say defaults from these no-money-down loans are rising to such an extent that they threaten to put taxpayers on the hook, supporters say many borrowers with good credit but without enough money saved up for a down payment will be locked out of the market.

"That's going to cause a lot of people not to be able to buy a house," said Mike Davis, a Realtor in Wes Des Moines, Iowa. "That's really going to hurt."

Cutting a deal

In stepping back from a veto threat, the White House swallowed its distaste for the grants for devastated neighborhoods. In return, the administration got the power to throw Fannie and Freddie a lifeline, as well as legislation Republicans have long advocated to rein in the two lenders, which hold or back nearly half of U.S. mortgage debt.

Treasury Secretary Henry M. Paulson and lawmakers in both parties negotiated the final deal.

"It is the product of a very significant set of compromises," said Rep. Barney Frank, chairman of the House Financial Services Committee.

Paulson said he would push for enactment of the bill by week's end.

(Associated Press writer Julie Hirschfeld Davis contributed to this report.)