Washington, D.C. ? President Bush said Friday he would nominate Steven C. Preston, the head of the Small Business Administration, to take over the Department of Housing and Urban Development at a time when the housing industry is in turmoil.

If confirmed by the Senate, Preston would replace Alphonso Jackson, who resigned March 31 amid a criminal investigation into favoritism in awarding contracts.

Although only nine months remain in the president’s tenure, the nomination carries unusual importance because the sub-prime mortgage crisis and foreclosures are rippling through the economy.

Bush said the department needs “strong leadership at a time when our housing market is experiencing a period of challenge and uncertainty.” Preston, 47, brings “an impressive background in finance” and “understands the important role the housing market plays in the broader economy,” Bush said.

His nomination was greeted with concern by a senior Democrat responsible for housing issues because he lacks experience in housing matters, but praise from another senior Democrat for his efforts to rebuild the SBA.

Preston won unanimous support from the Senate for his appointment to the SBA post and has led the agency since July 2006.