The White House says President Bush has dropped his opposition to a Democratic version of a major housing bill and will sign it despite his opposition to a 3.9 billion dollar provision.

The provision provides funding for communities to buy, fix up and resell foreclosed properties. Supporters of the measure point to a need to restore market stability and investor confidence.

White House press secretary Dana Perino announced the president's switch in a conference call with reporters Wednesday morning. She said the president believes this is not the time for a prolonged veto fight, although she said she expected the White House would win the battle if Bush decided to cast a veto.

The original intent of the housing bill was getting homeowners caught in the credit crunch into more affordable mortgages.

But the bill is now also the vehicle to give a financial lifeline to mortgage giants Fannie Mae and Freddie Mac, if they need one. Critics say granting unlimited support for the mortgage giants opens taxpayers up to huge losses. The head of the congressional budget office says a federal rescue could cost taxpayers about 25 billion dollars.

Regardless, the House is expected to pass the bill Wednesday.

(Copyright 2008 by The Associated Press. All Rights Reserved.)