The US House of Representatives approved a package of legislation on Wednesday designed to breathe fresh life into the ailing US housing market after the White House dropped its threat to veto the measures.

The bill, which will give Hank Paulson, the US Treasury secretary, the power to inject capital into Fannie Mae and Freddie Mac – if necessary – and creates a new regulator for the struggling government-sponsored mortgage companies, was passed by 272 to 152.