Legislation to tighten the regulation of Fannie Mae and Freddie Mac, the US government-sponsored mortgage companies, will be considered early next month by a Senate committee amid intensifying efforts in Congress to tackle the housing crisis.

A congressional aide on Monday told the Financial Times that Chris Dodd, chairman of the Senate banking committee, had scheduled May 6 to advance a “GSE reform” bill. On the same day, the committee will vote on a $400bn (€251bn, £202bn) intervention in the mortgage market through the Federal Housing Administration.

A regulatory overhaul for Fannie Mae and Freddie Mac has long been advocated by the US administration, but had not garnered enough support in the Senate.

Meanwhile, the White House and Republicans have been sceptical of plans by Mr Dodd and Barney Frank, chairman of the House financial services committee, to use up to $400bn in public funds to guarantee mortgages refinanced at lower home values through the FHA.

Consideration of the GSE reform and the FHA refinancing on the same day suggests a compromise allowing for the passage of both is being worked out.

Mr Dodd told the FT last week a deal was needed soon before prices fell further and election-year politics took over.

Reform has acquired a new sense of urgency since Fannie Mae, Freddie Mac and other government-sponsored mortgage companies have become the backbone of the US mortgage market in recent months as private finance has all but dried up.

Fannie, Freddie and the Federal Home Loan Banks – a network of co-operatives founded during the Depression – provided about 90 per cent of the financing for new mortgages at the end of 2007, according to Office of Federal Housing Enterprise Oversight. James Lockhart, director of the Ofheo, has long argued enhanced regulatory power was needed to monitor their rapid growth.

“Expansion of their activities would be imprudent unless the regulator has significantly more powers and more flexibility to use those powers,” he said. “Given tremendous stresses on mortgage markets, the American people cannot afford to have Fannie Mae, Freddie Mac or the 12 Federal Home Loan Banks incapable of serving their mission.”