The Senate voted 96-to-1 Thursday to approve a compromise spending bill that would raise the caps on government-backed mortgage loans.

A measure in the $94 billion appropriations bill for housing, veterans, and other programs would let the Department of Housing and Urban Development's FHA program insure residential mortgages as large as $197,621 in high-cost areas and $109,032 in the cheapest housing markets. The current limits are $170,362 and $86,317, respectively.

President Clinton is expected to sign the legislation, which the House approved Tuesday by 409 to 14.

The Clinton administration had proposed raising the FHA upper loan limit to equal the $227,000 cap on loans Fannie Mae and Freddie Mac may buy. The government-sponsored enterprises opposed the higher limits and were also pleased that the bill requires lenders to tell borrowers of the difference in cost between FHA-backed loans versus privately insured loans.

Separately, sources said House and Senate leaders, under pressure from Sen. Lauch Faircloth, R-N.C., would kill a provision in the bill letting Freddie Mac offer an alternative to private mortgage insurance for low- down-payment loans.

Also, the bill would eliminate the cap on loans for multifamily residences that may be bought by Fannie Mae or Freddie Mac. The current caps vary widely based on building type and location but include limits of $30,420 per unit for a garden-style apartment and $35,100 for a high-rise efficiency in high-cost areas.

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