WASHINGTON -- The Senate Banking Committee seemed poised to act quickly to confirm Steven Preston, the White House's nominee to run the Department of Housing and Urban Development. Lawmakers said at a hearing that the agency needed leadership immediately.

Democrats and Republicans praised Mr. Preston, saying they were impressed by his management of the Small Business Administration. They said someone needed to restore confidence and morale at HUD, which handles one of the Bush administration's top efforts to address the housing turmoil.

The agency has been beset by multiple scandals. Former HUD Secretary Alphonso Jackson stepped down amid multiple investigations on April 18. He has consistently denied any wrongdoing.

"I'm very hopeful that you will have what it takes to begin to address the major challenges at HUD and in the larger housing market," Senate Banking Committee Chairman Christopher Dodd (D., Conn.) told Mr. Preston.

Sen. Dodd asked Mr. Preston to weigh in on a new Senate plan that would allow the Federal Housing Administration, a division of HUD, to insure up to $300 billion in refinanced mortgages. Lawmakers and the White House are still posturing over the plan, and Mr. Preston was careful not to appear to take sides.

"I come into this with a very open mind," Mr. Preston said.

HUD also has some powers over Fannie Mae and Freddie Mac, which Mr. Preston described as having a "mammoth impact on our capital markets." He acknowledged the sometimes conflicting missions at both companies, which are publicly traded but were chartered by Congress to help promote affordable housing.

"We have to bridge those two missions, which can be a tension at times," Mr. Preston said.

Under questioning from Sen. Dodd, Mr. Preston agreed to investigate and report back to Congress about how HUD awards contracts, an area that has come under extreme scrutiny because of allegations of cronyism and favoritism.

Sen. Dodd said he still had concerns about the nominee's lack of housing experience, but he acknowledged the positive statements made by Democrats who worked with Mr. Preston at SBA. Mr. Preston played up his time there in an effort to show that he can turn around troubled bureaucracies.

"I think we were really able to energize the workforce," he said. "I firmly believe that as a leader, anytime you've got a big job to do, you've got to communicate...to people and get them to buy on."

When the White House nominated Mr. Preston last month, Sen. Dodd immediately raised questions about the nominees experience in housing. This made the prospects for Mr. Preston's nomination uncertain, as Sen. Dodd can easily quash nominations he opposes. But Sen. Dodd said he was impressed with Mr. Preston after a recent meeting and it appeared they would move soon to a vote, perhaps as soon as next month. The full Senate could vote on the nomination shortly thereafter, barring any snags.

"You've scored some very significant points with people who have come to work with you," Sen. Dodd said.

Sen. Dodd also said he planned to push to have the big housing rescue package, which includes the creation of a new regulator to supervise Fannie Mae and Freddie Mac, on the floor of the full Senate by the 4th of July.

Separately, Sen. Dodd said he was hopeful his staff would meet with officials from House Financial Services Committee Chairman Barney Frank's office over the Memorial Day recess to begin ironing out differences between the housing plans in the House and the Senate.

Write to Damian Paletta at damian.paletta@wsj.com

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