WASHINGTON — President Bush chose Steven C. Preston on Friday as his new housing secretary, praising him as a “consensus builder” and “a reformer who would act aggressively” to help families facing foreclosure to stay in their homes.
But several lawmakers and housing advocates said they remained uncertain whether Mr. Preston, 47, who currently heads the Small Business Administration, would push the federal housing agency to embrace a more assertive role in the nation’s housing crisis or would instead serve as merely a caretaker in the waning months of the Bush administration.
Mr. Preston would certainly inherit significant challenges as the head of the Department of Housing and Urban Development, which has come to new prominence recently in the administration’s effort to help staunch the flood of foreclosures across the country.
The Federal Housing Administration, the branch of HUD that officials are asking to help hundreds of thousands of vulnerable homeowners refinance to stable, government-backed loans, is on the brink of insolvency. Democrats and some Republicans argue that the department’s budget for public and low income housing is inadequate.
And some lawmakers, even as they welcome the change in HUD’s leadership, remain skeptical that the Bush administration’s approach to the flood of foreclosures is adequate to the need.
Senator Christopher J. Dodd, the Connecticut Democrat who is chairman of the Banking Committee and has been strongly critical of the departing secretary, Alphonso R. Jackson, also noted that Mr. Preston would be landing in the job without any experience in housing matters.
“We need a strong leader at the Department of Housing and Urban Development,” Mr. Dodd said. “Yet the president’s choice has no apparent housing background, which raises questions.”
Dismissing such concerns, Mr. Bush praised Mr. Preston as a leader “who’s earned the respect of Republicans and Democrats, who can get things done.”
Mr. Jackson, 64, resigned in the midst of a federal investigation into whether he steered lucrative housing contracts to friends. On Friday, Mr. Bush praised him as “a decent man, a dedicated man,” who had “worked tirelessly to help America’s homeowners.”
Bush administration officials say Mr. Preston, who won easy Senate approval for his current posting, is well positioned to succeed Mr. Jackson in handling the housing crisis, particularly given his experience in government and in the private sector.
Before being named S.B.A. administrator in 2006, Mr. Preston served as executive vice president of the ServiceMaster Company, a multibillion-dollar corporation whose businesses include TruGreen ChemLawn, a lawn care company, and Terminix, a pest control company. Earlier in his career, he worked as an investment banker at Lehman Brothers.
Mr. Preston said he joined the Bush administration in the first place because of his belief “in the vision of helping people reach their dreams of owning a business, owning a retirement portfolio and, of course, owning a home.”
As for the current problems in housing, Mr. Preston said, “Our solutions must restore confidence in our markets while not erecting barriers to future entrepreneurs, investors and home buyers.”
Over the years, Mr. Preston has won praise from lawmakers on both sides of the aisle for bringing stability to the Small Business Administration, which has been devastated by budget cuts and poor performance after Hurricane Katrina. Mr. Preston made fixing the disaster loans program, which provides long-term loans to homeowners and businesses, his priority when he took office.
He also tackled an issue that had dogged the agency under previous administrators, instances in which large companies received small-business contracts.
But his tenure was not without controversy. In 2007, S.B.A. workers reported to their superiors that the agency, in an effort to speed the disaster loans process after months of criticism, made thousands of loans without following its own rules to avoid fraud.
And earlier this year, Mr. Preston was sharply criticized when Democrats in Congress learned that his agency had given a $1.2 million contract to a former Bush administration official who lacked experience in helping small businesses compete for government contracts.
The contract went to a company owned by Vernon B. Parker, who served as assistant secretary for civil rights in the Agriculture Department from 2003 to 2006. Mr. Preston called on the agency’s inspector general to investigate.
On Friday, Mr. Preston began reaching out to housing advocates, making telephone calls to introduce himself.
“He has a reputation as a good manager and that’s certainly what HUD needs at this point,” said Sheila Crowley of the Low Income Housing Coalition, who received a call. “But there is not a lot of time, and there are a lot of problems at the agency.”
Senator Charles E. Schumer, Democrat of New York and a member of the Banking Committee, said he was hopeful that Mr. Preston was up to the job.
“The No. 1 criteria for this job is strength and independence to persuade the administration that more government involvement is needed on the housing crisis and the economy,” Mr. Schumer said. “It remains to be seen whether Mr. Preston has these qualities.”
Ron Nixon contributed reporting.