PROVIDENCE — Providence will receive at least $10 million to combat the effects of housing foreclosures as a result of the housing bailout bill signed by the president last week, and the capital city could see far more, depending on how the program’s rules are written.

The windfall comes from the $300-billion Housing and Economic Recovery Act of 2008. The bill includes $3.92 billion for the states to buy and repair foreclosed houses.

It’s not clear exactly how that money will be divvied up, but Providence Planning Director Thomas E. Deller said yesterday that the state can count on at least a “small state share” of $19.8 million, and Providence about half of that.

“Somewhere around $10 million will come to Providence. It could be more. It won’t be less,” Deller said.

The lion’s share of the state’s foreclosures are in Providence, which is among the hardest-hit cities nationally, Deller said.

Depending on how the federal Department of Housing and Urban Development writes the formula, Rhode Island could receive anywhere from $20 million to $64 million, Deller said, and Providence’s share would rise accordingly.

But few of the specifics on the housing bill are clear so far, said Rhode Island Housing Director Richard Godfrey.

The bill was initially proposed in February and then dead by April, Godfrey said. Even when it was resurrected, the stickiest part was the $3.92-billion for foreclosures, which the Bush administration had stridently opposed. When that item passed, there was no set approach for dealing with it, Godfrey said.

“The HUD officials were caught just as much off guard as we were,” he said. Now, the federal agency has until Sept. 26 to craft rules, and determine how much each state gets. The money must be spent 18 months after that.

“No one was planning for it, and there’s no mechanism to deal with it, and now we’ve got 18 months and 60 days to get it all spent,” Godfrey said.

Large homebuilders operating primarily in southern and western states are lobbying hard for the formula to be slanted to address problems stemming from the recent construction surge of newly built homes. Rhode Island’s problems are far different, he said, because long-existing housing stock is falling vacant.

“HUD is creating the formula, and we don’t know whether it will favor Nevada or Rhode Island,” Godfrey said.

The passage of the bill comes amid an ongoing debate about Providence borrowing $10 million to deal with the foreclosure crisis locally, and paying it back over 20 years. Mayor David N. Cicilline has pushed that borrowing, but the City Council has been unenthusiastic and has debated the proposal extensively for months.

With this $10 million in federal money now seemingly assured, the mayor has asked the City Council to hold off on further discussions about the borrowing plan, which left Councilwoman Josephine DiRuzzo feeling vindicated that the council had taken its time deliberating on the plan.

“We did the right thing. I know some of my colleagues are frustrated with me, but I’m glad we waited,” she said.

Deller said the city may still want the council to consider authorizing some borrowing, to serve as gap financing to keep residents in their homes while the city works on the foreclosure problem.

dbarbari@projo.com