All eyes will be on the House of Representatives tomorrow, Oct. 3, as it again tries to pass the financial services rescue bill.

The stakes couldn’t be higher, as more financial institutions teeter on the brink of collapse following the lead of Wachovia, Washington Mutual, AIG, and Merrill Lynch.

“This is a disaster waiting to happen if they don’t act quickly,” said Doug Bibby, president of the National Multi Housing Council (NMHC). “What’s at risk here are more institutions failing, more job losses, more stress to the system. This economy is weakening rather dramatically right now.”

The NMHC is getting daily reports of steep job cuts from its members. More and more multifamily developers are laying off entire development teams as the financial crisis worsens and access to credit dries up, Bibby said.

The trade group is guardedly optimistic that the bill will pass the House. But while the $700 billion bailout bill is designed to buy troubled assets from financial institutions—freeing them up to make more loans—it won’t immediately jump-start the stalled lending market once passed.

“We hope this will unfreeze the lending pipeline within a reasonable timeframe, but it isn’t going to happen overnight,” said Bibby. “What this bill is trying to do is calm the markets.”

The current bill also includes a provision raising the FDIC’s ability to insure bank deposits of up to $250,000, up from the current $100,000 limit, as well as an extension of business tax breaks.

The development industry is hopeful that the bill will be the first step in stabilizing the panicked financial markets. Sandy Dunn, chairman of the National Association of Home Builders (NAHB), called the upcoming House vote “our last chance to save the global economy from a very deep and painful recession, or worse,” in a statement.

The House vote, slated for Friday, a tumultuous week. As Congress bickered earlier this week, the Dow Jones Industrial Average dropped 777 points, its largest single-day collapse, and short-term interest rates like the SIFMA municipal swap index and LIBOR spiraled out of control.

Interest rates for seven-day variable-rate bonds shot up from 1.8 percent in mid-September to 7.96 percent two weeks later. And LIBOR, a benchmark used to set many short-term loans like construction financing, also went crazy after the bill was initially defeated in the House, spiking up 431 basis points Sept. 30, to an all-time high of 6.8 percent.