Who will benefit from the new federal housing act?

— -- Is it a remedy for the worst housing slump the nation has suffered in decades? Or merely a taxpayer-funded bailout that will fail to reverse the plunge in home prices, the surge in foreclosures and the grave threat that overhangs the economy?

The housing act, which won final approval in Congress on Saturday and which President Bush has said he will sign despite some objections, is historic in its sweep and ambition. It aims to provide relief to homeowners, incentives to buyers, guidance to lenders and oversight to vital government-sponsored entities, such as Fannie Mae and Freddie Mac.

Who, really, will benefit? And for how long? Will the legislation make a real difference for those who most desperately need help?

It depends, of course, on whom you ask. The act has plenty of fans. But skepticism abounds, too.

"The bill is not a silver bullet," says Mark Zandi, chief economist of Moody's Economy.com. "We have to string together several platinum bullets."

Yet Zandi endorses the legislation as among the most important steps that can be done now to prop up the housing market.

On paper, the act holds out help for thousands in need:

• Up to 400,000 homeowners at risk of losing their homes to foreclosure.

• First-time buyers who can't afford full down payments.

• States and cities that will receive money to redevelop abandoned and foreclosed homes.

•People in need of mortgage counseling.

•Fannie Mae and Freddie Mac, which own or guarantee nearly half the nation's mortgages and which now have a rescue plan.

But is it enough? Even if 400,000 homeowners can avoid foreclosure — a figure that a few critics dispute — some estimates put the number of potential foreclosures between 2007 and 2012 at up to 6 million

"We're not getting enough for our money," says John Vogel, an adjunct professor at Tuck School of Business at Dartmouth. "Sure, some number of families — 100,000 or 200,000 — will be helped, and that's not insignificant. But it will not address the problem as fully as we have liked."

Vogel notes that those in danger of foreclosure won't benefit unless their lender agrees to reduce the balance on their mortgage; for the lenders, it's purely voluntary.

Not since the National Housing Act of 1934 has legislation addressed a class as large as homeowners, without restricting the benefits to veterans, urban dwellers or low-income people. The 1934 law, which created the Federal Housing Administration and authorized the creation of Fannie Mae, sought to protect homeowners as a group.

The question now is whether the current measure, sprawling as it is, will do what's it's designed to do and serve those it aims to help. Here's a look at six groups that are intended to benefit.

HOMEOWNERS

$300 billion in FHA loans for refinancing

The bill pledges $300 billion in federally insured mortgages to help an estimated 400,000 homeowners avoid foreclosure by refinancing into lower-cost mortgages insured by the Federal Housing Administration. People can benefit if their lenders agree to reduce their mortgage principal. The borrowers must meet certain income caps and share any profit with the government on a sale of the home.

Zandi of Moody's Economy.com says the refinancing provision "highlights why the housing bill is so important."

While some housing advocates and economists applaud the efforts as a major step in rescuing homeowners, some critics question how big the effect will be.

Dean Baker, co-director of the Center for Economic and Policy Research in Washington, notes that 400,000 homeowners are but a fraction of those in need of aid and that foreclosures will continue their ominous climb. Nationwide, 739,714 homes received at least one foreclosure-related notice during the second quarter, more than twice as many as in last year's second quarter.