WASHINGTON, July 23, 2008 (AFP) - The US House of Representatives on Wednesday approved a wide-ranging housing rescue plan aimed at helping thousands of homeowners avoid foreclosure and supporting mortgage finance giants that have faltered in a turbulent housing market.

The House passed the bill by 272 votes to 152.

The legislation will now be submitted to the Senate and President George W. Bush for his signature.

The plan, which offers aid to homeowners facing foreclosure and seeks to restore confidence in mortgage finance giants Fannie Mae and Freddie Mac, cleared a major hurdle Wednesday when the White House dropped its threat to veto the plan, despite some reservations.

The bill provides some 3.9 billion dollars to help local governments buy and rehabilitate foreclosed homes.

It also permanently boosts the dollar limit for mortgages that can be repurchased by Fannie Mae and Freddie Mac and expands the federal mortgage insurance program, moves that could add liquidity to the housing market.

Significantly, the bill reforms Fannie and Freddie's oversight and would provide for new credit and direct federal investment in the government-sponsored enterprises, which have a congressional charter but are owned by shareholders.