President Bush’s choice of Steve Preston to run the Department of Housing and Urban Development (HUD) got a mixed reception on Capitol Hill.

In a statement issued by his office, Senate Banking Committee Chairman Chris Dodd (D-Conn.) noted that Preston, who currently runs the Small Business Administration (SBA), has “no apparent housing background” — a fact he said raises questions about his qualifications for the job.

The chairwoman of the House Small Business Committee, Rep. Nydia Velazquez (D-N.Y.), argued that it was “short-sighted” to trade “one troubled agency for another.”

She asserted that Preston would leave the helm of an agency “still plagued by serious problems of its own,” citing low morale among SBA employees, the “failure” of SBA’s Katrina disaster relief program and small business contracts being snatched by large firms.

Meanwhile, Sen. Charles Schumer (D-N.Y.), who has served as one of the administration’s most vocal critics on its handling of the mortgage mess, urged an open mind on Bush’s pick.

Saying it was “regrettable” that Preston had no housing background, Schumer argued that the most important criterion for the job is the ability “to persuade the administration that more government involvement is needed on the housing crisis and the economy.”

“It remains to be seen whether Mr. Preston has these qualities,” he said.

Meanwhile, Republicans offered praise for Bush’s pick. Senate Minority Leader Mitch McConnell (R-Ky.) said Preston has an “excellent record” in his current role as SBA head.

Sen. Olympia Snowe (R-Maine), the ranking member on the Senate Small Business and Entrepreneurship Committee, called Preston “a terrific choice” and praised him as a “tremendous advocate for the nation’s small businesses.”

The White House said Bush was impressed with Preston during his time at SBA, stressing that he has “effectively managed loan guarantee programs similar in structure to those run by the HUD.”

The president also likes Preston for his ability to solve problems and his leadership. Among his accomplishments at SBA, the White House listed Preston’s impact on American small businesses by helping them compete in a global economy.

In addition, the White House also pointed out that Sen. John Kerry (D-Mass.), who knows Preston through his work as chairman of the Committee on Small Business and Entrepreneurship told the Associated Press about the nominee: “We may have some differences on policy, but he's always been professional, responsive, and dedicated to the mission.”

Bush’s nomination of Preston comes after HUD’s former head, Alphonso Jackson, stepped down last month amid accusations of cronyism and partisan management.

An Inspector General’s report revealed that Jackson had urged senior staff to take political affiliation into account when awarding contracts. In addition, he faces allegations that high-level HUD officials were scheming to take away federal funds from the Philadelphia Housing Authority after it did not turn over land to one of Jackson’s friends.

Dodd and Sen. Patty Murray (D-Wash.), the chairwoman of the Appropriations housing subcommittee, called for Jackson’s resignation after he refused to answer questions about the allegations during appearances before their panels.

Jackson resigned on March 31, citing a desire to spend more time with his family.

In remarks on Friday, Bush praised Preston’s record leading the SBA and a “quarter-century of management experience.”

Prior to joining the administration, Preston served as chief executive of the ServiceMaster Company, as well as a top executive at First Data Corporation. He also worked as an investment banker at Lehman Brothers.

Dodd said that, despite his misgivings about Preston’s apparent lack of experience on housing, he looked forward to learning more about his qualifications for the job.