A day after the House of Representatives passed legislation that would expand the pool of borrowers eligible for loans insured by the Federal Housing Administration, a Senate committee issued its own, scaled-back version of the bill.

The House bill approved Tuesday in a 348-72 vote would raise the limit on loans eligible for FHA backing from $362,000 in high-cost areas to as much as $729,750 –175 percent of the conforming loan limit — and also eliminate the current 3 percent down-payment requirement.

Although the Bush administration supports modifying the rules governing FHA to allow it to serve more borrowers, it has taken issue with some provisions of the version of the bill approved by the House.

A Senate version of a bill approved by the Senate Banking Committee today would lower the down-payment requirement to 1.5 percent, but not eliminate it. The Senate bill would allow FHA to insure loans only up to the $417,000 conforming loan limit in high-cost areas, as proposed by the Bush administration.

House and Senate lawmakers will need to write a compromise bill that reconciles those and other differences in the two versions. Last year, the House passed an FHA modernization bill in a 415-7 vote, but the Senate did not follow suit.

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