The Senate on Friday passed legislation designed to modernize the Federal Housing Administration’s mortgage insurance program to give home buyers a safe, low-cost alternative to subprime loans.

The bill, which has the support of the Bush administration, would increase loan limits for FHA-insured mortgages and reduce the minimum down payment that home buyers must come up with. It passed 93-1.

Sen. Christopher J. Dodd, D-Conn., the bill’s sponsor, said in a statement after the vote, “This measure can shield homeowners from harm by helping families find safe, fair and affordable mortgages. It can help provide credit, both for new homeowners and those seeking a way out of abusive loans in which they are currently trapped.”

The bill would reduce the required minimum down payment for an FHA-insured loan and simplify its calculation, requiring a flat 1.5 percent of the appraised value of the home, down from 3 percent currently. Borrowers who put down less than 3 percent would be required to undergo counseling.

The measure also would raise the dollar limit on mortgages the FHA can insure to the conforming loan limit — the size of loans that Fannie Mae and Freddie Mac, government-sponsored enterprises, may purchase. That limit is currently $417,000. FHA-backed loans under existing law can be no more than $362,000, far less than the amounts borrowers need in states such as New York, New Jersey, Connecticut and California.

The House passed its own FHA overhaul Sept. 18, but the two bills differ significantly. House leaders now will have to decide whether to clear the more limited Senate legislation or insist on a conference to reconcile the competing versions.