It will now move on to the Democrat-controlled U.S. Senate for approval. It is expected to pass.

The bill effectively sets a new regulator for the two mortgage giants. It is geared towards alleviating some of the pressures in the U.S. housing market; a problem which several experts have said must be resolved before the U.S. economy can recover.

A key part of the bill includes a reform plan for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, which came under pressure as default rates in the United States soared.

"This bill includes GSE rescue package, the Dodd/Frank FHA housing proposal, and debt limit increase," explained Tom Block at JPMorgan Chase. "The GSE language gives the Secretary very broad authority to buy stock."

On this topic, the bill reads, "Secretary of the Treasury is authorized to purchase any obligations and other securities issued by the corporation under any section of his Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires the corporation to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the corporation. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the corporation, to engage in open market purchases of the common securities of the corporation."

By Steve Stecyk, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it

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