Senate Banking signs off on FHA reforms

"I look forward to continuing this strong bipartisan process as we quickly turn our attention toward important, comprehensive reforms to our mortgage market," Crapo said.

The FHA bill would give the housing agency more flexibility to address deficiencies in its balance sheet, and ensure taxpayers will not need to step in and provide a bailout.

It would boost the capital reserve ratio of the FHA's Mutual Mortgage Insurance Fund. It would also require minimum annual mortgage insurance premiums in an effort to boost the FHA's solvency long-term, and those levels would be revisited each year.

The Department of Housing and Urban Development would also be given more flexibility under the bill when it comes to the FHA's reverse mortgage program, and new tools to go after lenders that issue inappropriate or fraudulent mortgages.