The House ignored the Bush administration's veto threat last night and approved a plan to rescue a major federal housing insurance program from potential insolvency.

The action came as the House moved toward passage of a housing bill that differs sharply from a Senate measure approved earlier this summer. Final action on the House bill is expected today.

Unlike the Senate, which called for a major overhaul of various federal housing programs, the House appeared ready to endorse existing programs, including some tainted by recent scandals in the Housing and Urban Development Department.

A predicted floor fight failed to materialize when the administration dropped its insistence that the House restore the health of the Mutual Mortgage Insurance Fund, a major fund run by the Federal Housing Administration, part of HUD.

Although untainted by scandal, the fund has been losing money, and some Republicans had warned it could turn into another savings-and-loan crisis. Using some of those arguments, the Bush administration won overwhelming Senate approval in June of steps to restore the fund's health, including larger down payments by prospective home buyers.

But House members refused to go along. Instead, they agreed to a bipartisan proposal that would keep most home down payments at current levels and aid the FHA fund by prohibiting FHA insurance for any loans that exceed the value of a mortgaged property.

"This is very tough medicine under any scenario," said Rep. Bruce F. Vento (D-Minn.) after the House approved on a 418 to 2 vote the measure he and Rep. Thomas Ridge (R-Pa.) had fashioned. Ridge predicted that the lopsided vote would help House negotiators prevail in housing bill negotiations with the Senate.

The administration said the Vento-Ridge amendment would make the bill unacceptable to the president. However, it was supported by a broad coalition that included labor, mayors and homebuilders -- the traditional alliance behind major housing bills in the 1970s. The amendment also was helped by concerns over sluggish home sales and worries that homeownership had declined during the past decade.

"With homeownership on the decline, we can't afford to put up any more artificial barriers," said Rep. Kweisi Mfume (D-Md.). Supporters of the Vento-Ridge measure argued that the administration's approach would add $1,400 to the cash down payment needed by the typical home purchaser and would preclude 100,000 potential homeowners from buying homes.

GOP lawmakers muted their arguments against the amendment, saying the administration would mount its fight at the House-Senate conference committee. House Minority Whip Newt Gingrich (R-Ga.) told Republicans the Vento-Ridge amendment was a "good" one, but promised HUD Secretary Jack Kemp would be actively lobbying to change it during the conference with the Senate.