There's help for Sacramentans buying pricier houses and tax breaks for first-timers just breaking into the market. There's assistance for distressed borrowers hoping to refinance, and cash for cities to buy up foreclosed properties and ward off blight.

But the big federal housing-market bailout bill, which passed in the House and received President Bush's belated blessing Wednesday, also wipes out a long-established, born-in-Sacramento program that's helped tens of thousands of lower-income homebuyers make down payments.

As the Sacramento area continues to wrestle with some of the worst foreclosure rates in the nation, market analysts had mostly good things to say about the federal legislation. The bill, whose major purpose is to rescue troubled mortgage giants Fannie Mae and Freddie Mac, was assured passage Wednesday when Bush withdrew his threat to veto it.

The measure is expected to reach his desk in a few days, after the Senate passes it.

The bill has plenty of features that could help the Sacramento area's beleaguered market. One is a refinance program that will allow some homeowners to swap costly subprime loans for affordable Federal Housing Administration mortgages.

The bill also establishes permanently higher loan limits on mortgages from the Federal Housing Administration, Fannie Mae and Freddie Mac, a move that will help reduce interest costs for those buying pricier properties. That's been a big issue in high-cost markets like California as tightened credit markets have made so-called "jumbo" mortgages considerably less affordable in the past year.

Similarly, there was applause for the $3.9 billion in anti-blight cash for communities across the nation to buy vacant, foreclosed properties, as well as federal tax credits for first-time homebuyers who purchase before next July.

Yet there was also criticism for a provision that would shut a down payment assistance program pioneered by Sacramento's Nehemiah Corp. of America. The shutdown would take effect Oct. 1, according to a spokesman for the House Financial Services Committee. An earlier version would have killed the program the moment Bush signed it into law.

Closing the Nehemiah program and others like it is "going to hurt the housing market," said Jeff Johnson, manager of Platinum Home Mortgage in Citrus Heights. "The already depressed housing market is going to take a dive because of this."

There are other down payment-assistance programs but none as flexible or comprehensive as Nehemiah's, Johnson said. Of the 40 mortgage loans he has in the pipeline, at least 60 percent involve the Nehemiah program, he said.

It was barred after the FHA complained too many borrowers using the program defaulted on the loans, a claim Nehemiah disputes.

Overall, though, Sacramento housing-market officials liked the bill, including the provision that would allow at least 400,000 families nationwide to refinance their subprime mortgages with FHA programs.

"It will help a segment of people, it is positive, it is a good thing for people who are struggling," said Pam Canada, executive director at the Sacramento office of Neighborworks Homeownership Center, a nonprofit group that assists troubled borrowers.

But John Arvanitis, president of Sunrise Vista Mortgage Corp. in Citrus Heights, said the provision won't help many who owe more than their homes are worth. "It's the proverbial rubber bone to the starving dog," he said.

Mortgage lenders were heartened that the bill makes permanent the higher limits on FHA, Fannie and Freddie loans.

Emergency legislation passed by Congress in the spring temporarily raised the limit in the Sacramento area from $417,000 to $580,000, according to lenders.

While that was somewhat helpful, the temporary nature made the credit markets skittish about making loans on expensive houses, said Mike McGee of Winchester McGee Real Estate & Loans in Rancho Cordova.

As a result, those loans have been priced "off the charts," he said. Rates are frequently at 8 percent or above. "We're not seeing a lot of high-end purchases going on," McGee said.

The new law will probably drop the loan limit in Sacramento slightly, but by making it permanent the flow of credit will improve, he said.

Arguably the most controversial part of the bill allocates $3.9 billion that municipalities can spend to buy vacant foreclosed properties. Bush at first threatened to veto the bill because he said that provision amounted to a bailout of predatory lenders who were now stuck with the properties.

But he relented because he favored so much of the bill – including provisions that will enable the U.S. Treasury to lend money to troubled Fannie and Freddie – and didn't want to get into a "prolonged veto fight," the White House said.

The Sacramento Housing and Redevelopment Agency expects to get at least $12 million, and as much as $30 million, said assistant director Cindy Cavanaugh.

She said the funds will likely be targeted at the hardest-hit neighborhoods, including those where there have been lots of building-code problems.

"There's block after block where there are vacant homes that are deteriorating," Canada said. "They're causing problems in the neighborhood, they attract crime."

A Bee investigation last year found an influx of transients, drug dealers and other problems on Western Avenue in North Sacramento, where one out of every three homes had been foreclosed. That was more than any other block in greater Sacramento, and officials said the foreclosure crisis had clearly made things worse on an already-troubled neighborhood.

Call The Bee's Dale Kasler, (916) 321-1066.