Passed by the House but stalled in the Senate, the Housing and Community Development Act of 1994 would have eased restrictions on eligibility for mortgage insurance from the Federal Housing Administration.
The FHA insures mortgages for families who cannot qualify for mortgage insurance from private insurers.
In high-priced areas, including Baltimore, the FHA insures mortgages up to $151,725. The Senate version of the bill would have raised that limit by a few thousand dollars; the House plan would have raised the cap by more than $20,000.
The bill would also have increased the limit in lower-priced areas by at least $10,000, a substantial jump from the current $67,500.
Other portions of the same bill would have simplified federal aid to the homeless and made it easier to repair and replace decrepit public housing.
Most lenders require mortgage insurance -- which protects them in case of default -- if the borrower puts down less than 20 percent of the price of the house. FHA-insured loans have easier qualifying terms than conventional, private loans.
"There are hundreds and hundreds of homes that would have been available to homebuyers in Baltimore City and County if the limits were raised," said Nancy Hubble, president of the Greater Baltimore Board of Realtors and a partner in the real estate firm W. H. C. Wilson and Co. in Baltimore.
"We want to see the limits increased, because the price of housing has continued to climb," she said. "The FHA has to keep pace with the market."
The average price of a home sold in the Baltimore area was $135,299 in August, according to the Greater Baltimore Board of Realtors. The average in Howard County was $195,271.
Raising the limit, according to the Department of Housing and Urban Development, would have opened the program to 270,000 more families.
"We think it's unfair," said Stephen Driesler, a spokesman for the National Association of Realtors. "This is critical in high-cost areas, where median-priced homes are well above the national average, where middle-class people like schoolteachers, police and factory workers are not eligible for FHA assistance in buying a home."
Last year, the FHA insured 938,000 mortgages in the United States, 36,000 in Maryland, excluding Prince George's and Montgomery counties in the Washington suburbs.
Congressional aides and other officials here said the legislation was doomed by a combination of partisan strife -- which has slowed much of the Senate's agenda -- and opposition from private mortgage insurers who viewed the changes as government-backed competition.
The Senate was bogged down in August when Republicans tried to block the crime and health care reform bills. More recent partisan squabbling scuttled much of the remaining Senate agenda.
But supporters on Capitol Hill and the National Association of Realtors say they plan to push for passage of the legislation when a new Congress reconvenes in January. Looking to the next session, advocates note the legislation's bipartisan support and say they are cautiously optimistic that it can pass.
"We ran out of time," Mr. Driesler said. "We will be making this a top priority on our agenda, and hopefully Congress will get this bill out early next time."