http://www.bloomberg.com/apps/news?pid=20601087&sid=ad.64Dq1gaA4&refer=home July 22 (Bloomberg) -- U.S. lawmakers reached agreement on a rescue plan for Fannie Mae and Freddie Mac that the House may vote on tomorrow, Representative Barney Frank said. Under a modified version of proposals made by the Bush administration, the Treasury Department would gain authority to inject capital into the two largest U.S. mortgage finance companies, through loans and equity investments. The Treasury would be barred from providing aid that would cause a breach in the federal debt ceiling under the agreement, a constraint aimed at limiting any taxpayer losses. The plan would give Treasury Secretary Henry Paulson power to restrict the companies' ability to pay dividends and require regulatory approval of the salaries of top executives. ``The package we have got is fully acceptable to Treasury,'' along with lawmakers in the Senate, said Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee. ``Nobody is for everything that's in it or got everything in it he wanted, but we negotiated a lot with the Treasury and the Senate.'' Treasury spokeswoman Brookly McLaughlin didn't immediately respond to a phone call requesting comment. The legislation would raise the limit on the size of the mortgages the companies may purchase. The new cap would be $625,000, or the median home price plus 15 percent, whichever is lower, Frank said. Frank's counterpart in the Senate issued a statement indicating he backs the bill now progressing in the House. `Fruitful Discussions' ``We have been engaged in extensive and largely fruitful discussions with our counterparts in the House'' and with Bush administration officials, Democratic Senator Christopher Dodd said in a joint statement with Republican Senator Richard Shelby distributed by e-mail. ``We remain optimistic about the prospects for this legislation.'' Dodd, of Connecticut, chairs the Senate Banking Committee and Shelby, of Alabama, is the panel's top Republican. Treasury Secretary Henry Paulson, who proposed a rescue program on July 13, reiterated today the plan is aimed at restoring investor confidence in the two companies. Fannie Mae has dropped about 45 percent in the past month, and Freddie Mac has tumbled about 60 percent, on concern the companies have insufficient capital to cover writedowns and losses amid the mortgage-market collapse. Pending Bill Lawmakers wrapped the plan into a housing bill that would create a program aimed to help an estimated 400,000 Americans with subprime home loans refinance into 30-year, fixed-rate mortgages backed by the government. The legislation includes tax breaks to help prop up the housing industry, including what would be the equivalent of an interest-free loan worth as much as $7,500 for first-time homebuyers. The Senate may vote on the legislation as early as July 24, said Jim Manley, a spokesman for Senate Majority Leader Harry Reid of Nevada. The bill would then go to President George W. Bush for final approval. A Congressional Budget Office estimate released today put the cost of Paulson's plan at $25 billion, a figure below the total that some lawmakers had expressed concern about. ``It's pretty good news -- a lot of people thought it would be much higher,'' Shelby said earlier today. Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac own or guarantee about half of the $12 trillion in outstanding home loans. The companies, which buy mortgages from banks, face mounting losses stemming from the collapse of the subprime home loan market. Paulson wanted Congress to grant the Treasury temporary authority to buy stock in the companies and offer an unlimited federal credit line.