WASHINGTON, June 26 (Reuters) - The U.S. Senate will not resume consideration of a major housing market rescue bill until after it returns in early July from its Independence Day recess, lawmakers and aides said on Thursday.

Republican Sen. John Ensign of Nevada has blocked further progress on the widely supported bill by insisting, against Democrats' wishes, that he be allowed to try to attach an amendment dealing with renewable energy tax credits.

"It looks like we're being held up on housing because of Sen. Ensign's insistence on an unrelated amendment," said Democratic Illinois Sen. Richard Durbin on Thursday.

Senate Majority Leader Harry Reid, a Nevada Democrat, late on Wednesday said the Senate would complete the housing bill on the first week after the recess ending on July 8.

The housing bill would create a multibillion dollar fund to help hundreds of thousands of homeowners refinance out of costly, exotic mortgages into more affordable loans backed by the government, if lenders agreed to take a loss on the loans.

The legislation would overhaul regulation of Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), the nation's largest mortgage finance companies, while also sending federal money to states and communities to buy and renovate foreclosed properties.

With home prices falling nationwide and foreclosures rising in a severe housing market slump, Congress has struggled to formulate a policy response since it passed a $168 billion, two-year economic stimulus package in February.

The White House has threatened to veto both the Senate's housing bill and a similar one passed by the House of Representatives. But the administration has signaled a willingness to work with lawmakers on a possible compromise.

In remarks on the Senate floor, Ensign said he wants his amendment attached to the housing measure because its chances of final passage, after months of debate, are very good.

"The housing bill, everyone around here knows, is one of the few bills that is going to be signed into law this year," said the lawmaker, whose state is being hit hard by a housing slump feared to be dragging the economy into a recession. (Reporting by Kevin Drawbaugh; Editing by Neil Stempleman)