The housing aid package (HR 3221) passed by the House Wednesday, the American Housing Rescue and Foreclosure Prevention Act of 2008, has been months in the making and represents Congress’ broadest response to date to the crisis in the U.S. housing market. Major provisions include:

• Creates a new independent agency, the Federal Housing Finance Agency (FHFA), to regulate Fannie Mae, Freddie Mac and the Federal Home Loan Bank System, to be funded through assessments on those GSEs.

• FHFA would oversee GSE operations and could adjust risk-based capital standards and minimum capital levels, place a critically undercapitalized GSE into receivership and take other corrective and enforcement actions.

• Requires FHFA to consult with the Federal Reserve before issuing any proposed or final regulations, orders or guidelines related to GSE management, operations, capital requirements and portfolio standards. Requirement expires Dec. 31, 2009.

• Gives FHFA authority to approve or modify GSE executive compensation.

• Grants the Treasury Department emergency authority throughDec. 31, 2009, to purchase stock in the mortgage giants. Treasury secretary would be required to make an emergency designation before using this authority.

• Gives Treasury secretary authority to increase the already-existing line of credit to Freddie and Fannie, now set at $2.25 billion, for the next 18 months.

• Permanently increases cap on mortgage loans Fannie and Freddie can purchase (“conforming loan limit”) to the lesser of $625,000 or 115 percent of an area’s median home price. Authorizes FHFA to adjust limit according to annual housing price index.

• Raises FHA loan limits to the lesser of 115 percent of the local area median home price or $625,500 (up from $362,790).

• Raises limit on size of reverse mortgages FHA can insure to $417,000 from $275,000.