The big national mortgage bill received congressional approval this weekend and should be signed shortly by President Bush. While the legislation provides financial backing for Fannie Mae and Freddie Mac and often is termed a mortgage rescue bill, there are elements that could have an impact on you and the local real estate market.

Here are some notable parts of the soon-to-be law, thanks to stories from the Washington Post and CNN:

• Permanently increases the size of home loans that Fannie Mae and Feddie Mac can buy and the FHA can insure to $625,000 for the priciest markets. You might remember that earlier this year Pierce County’s conforming loan limit grew temporarily from $417,000 to $567,500. The idea behind raising the limits is to move loans in the $450,000+-range from the pricier jumbo loan category to the cheaper conforming rates in areas where home prices have moved beyond the previous limits.
• A tax credit that’s really more of an interest-free loan of up to $7,500 for first-time home buyers on houses bought between April 9 and July 1 of next year. The credit must be repaid.
• The FHA gets $180 million for pre-foreclosure counseling to struggling homeowners.
• Lenders are required to show how high a borrower’s payment could get under the terms of a particular mortgage.
• Homeowners who don’t itemize on their tax returns could deduct a portion of their property taxes, expected to be $500 for single filers and $1,000 for joint or married filers. This would be particularly helpful to homeowners who have no mortgage and, therefore, no mortgage interest to deduct and no other reason to itemize.

Rich Bennion, executive vice president of Seattle-based HomeStreet Bank, said this afternoon that he expects the new conforming loan limit for Pierce County to come in at $522,100. Increasing the limits helps open up lending possibilities to more borrowers, he said.

Also important for the South Sound, he said, is a provision that allows the FHA to streamline the process for making a condominium elibible for an FHA-insured loan. Previously, an entire building would have to meet FHA guidelines, he said.

Though it’s unclear how the FHA will alter its condo-lending requirements, Bennion said he expects the changes to help first-time home buyers.

“That’s significant in our area because increasingly condos and condo converstions are more and more the affordable entry-level kind of housing. They’re less expensive and up til now you couldn’t get FHA loans in the typical condo project,” he said.

J. Lennox Scott, CEO of John L. Scott Real Estate, said this morning in an e-mailed statement that the legislation “is an enormous step forward for homeownership.” He emphasized the opportunity for first-time buyers to take advantage of the tax credit, which he said will help spur home sales activity.

“The ripple effect of increased sales in the more affordable markets will eventually cause a chain reaction of sales up the price points, helping to stabilize the entire housing economy,” Lennox said.