• Key insight: A retooled version of housing legislation passed the lower chamber by a wide bipartisan margin, including with active support from many Democrats for community bank measures. 
• What's at stake: As the bill goes back to the Senate, institutional investor and community bank measures are still in play. 
• Forward look: The Senate can choose to go to a conference committee or pass its own version of housing legislation, amended or otherwise, and send the legislation back to the House. 

WASHINGTON — The House has passed its revised housing bill 396 to 13, sending the legislation back to the Senate. 

The House of Representatives passed housing legislation that would increase local funding for housing construction, echoing a similar bill that previously passed through the full Senate, also with strong bipartisan support. 

The most recent House version of the legislation weakens a ban on institutional housing ownership by removing a requirement that investors of build-to-rent housing sell that within seven years. The rest of the institutional housing ban is the same as the Senate's version, after the House previously released a version that many Democrats and populist Republicans worried had a laundry list of loopholes, according to three people familiar with negotiations. 

The House version also includes a number of closely watched community bank measures that the Senate bill omits, including ones that would allow more small banks to engage in brokered and custodial deposits, and ones that would decrease oversight overall for the smallest institutions. 

Those two issues are still in play as the bill now goes back to the Senate. Sen. Elizabeth Warren, D-Mass., the ranking member of the Senate Banking Committee, has strongly backed the original institutional investor ban that existed in the Senate version of the bill. Two sources familiar with discussions say she's lobbying privately among Senate Democrats to oppose the community banking measures, arguing that they amount to a backdoor effort to deregulate the banking industry. 

It's now up to the Senate to either take up the House legislation, pass their own version or go into a conference committee with key House lawmakers, in which negotiators will iron out the differences. 

Senate Banking Committee Chairman Tim Scott, R-S.C., and Warren put out a statement ahead of the House vote on Wednesday suggesting that they will not support simply passing the House version of the legislation.

"There's still work to be done and we are committed to continuing to work with the White House and our colleagues in the House on a housing bill that can pass the Senate and get to the President's desk," the pair said. 

The White House on Tuesday evening came out in support of the House bill, after previously backing the Senate version. In a statement of administration policy, the White House said that the two chambers should "resolve any remaining differences expeditiously."

Last time the Senate revealed updated housing legislation that took out the House's community banking measures, Scott said that a bank legislative package was coming "soon," but that the housing bill wasn't the right place for them. 

"We're going to have a financial institutions package that addresses a lot of the issues around financing, whereas this is a home package, which is really focusing on how we spur more access on the local level, as much as it does anything else," Scott said in March. "We'll get to the other part of financial institutions here shortly."

House Financial Services Committee Chair French Hill, R-Ark., in response to a question from American Banker after the House vote on Wednesday, pushed back on the notion that the housing bill is the wrong venue for community banking provisions. 

"They do fit in the housing bill, because they are instrumental to the supply side of housing," Hill said of the community bank measures. 

"We've tried very much to address the supply side element," he said later. "If you do that, you can't ignore financing."