A House subcommittee cleared a bill Tuesday that would shore up the Federal Housing Administration (FHA)‘s ailing Mutual mortgage Insurance Fund by setting annual premiums for mortgage insurers and reworking the agency’s financial controls.

Lawmakers seated on the Insurance, Housing, and Community Opportunity subcommittee approved by voice vote the FHA Emergency Fiscal Solvency Act, fronting it for a full vote by the House.

If approved by the lower chamber and reconciled with a Senate bill, the act would require minimum premiums from

insurers every year, bar lenders in bad faith from participation in FHA loan guarantees, and mandate loss repayment by lenders guilty of defrauding the agency.

“The FHA’s cash reserves are down to dangerous levels, and taxpayers cannot afford another Fannie- and Freddie-style bailout,” Rep. Judy Biggert (R-Illinois) said in a statement.

She called on the Obama administration to “enforce stronger standards and create room for the private sector to replace taxpayers as the primary source of funding. The FHA is facing an urgent fiscal crisis, and this proposal gives HUD Secretary Donovan emergency tools to wind down the risk before it’s too late.”

The FHA continues to alarm policymakers for failing to keep adequate capital on hand for more than 7 million loans with insurance-in-force.

With only about $2.6 billion in capital to meet $1 trillion in insurance needs, analysts say the FHA could require a draw of anywhere from $50 billion to $100 billion from the Treasury, citing still-falling home prices and the potential for more loan defaults.

Critics charge that a recent proposal by the Obama administration to allow homeowners with private-label mortgages to refinance their loans by way of the FHA would only deepen fiscal distress for the government agency.