WASHINGTON – President Bush will sign into law a housing rescue package, despite objections about a provision to provide grants to communities to buy and repair foreclosed homes, because the legislation was needed promptly to address the crisis, the White House said on Wednesday.

“The positive aspects of the bill are needed now to increase confidence and stability in the housing and financial markets,” White House spokeswoman Dana Perino said.

“While we have concerns with other aspects of the bill, it is important that the new authorities are put in place promptly, and so President Bush will accept Secretary (Henry) Paulson's recommendation to sign the bill.”

Despite favoring much of the bill, the White House had threatened to veto it over a provision that calls for almost $4 billion in grants to states and communities for buying and repairing foreclosed homes in distressed neighborhoods, saying it helped lenders and not homeowners.

“We do not believe we have time for a prolonged veto fight,” Perino said.

The legislation was scheduled to come to a vote in the U.S. House Wednesday.

(Reporting by Tabassum Zakaria; Editing by Andrea Ricci)