He said that housing legislation is his top priority in the 116th Congress.

As part of that plan, Crapo has called for changes to the housing Government Sponsored Enterprises.

"In September 2008, Fannie Mae and Freddie Mac were placed into conservatorship," Crapo said. He added, "This perpetual conservatorship is not sustainable, nor is it in the best interest of consumers, taxpayers, investors, lenders or the broader economy."

But Banking Committee ranking Democrat Sherrod Brown of Ohio said the current system is working for small lenders and their customers.

"We shouldn't take steps that will create uncertainty for small lenders or drive unhealthy competition on quality and standards," he said. "This includes any changes that would allow the largest institutions to be one-stop-shops for lending, guarantees, and securitization with a government backstop."

In her testimony, Hunt said that an explicit government guarantee must be part of any overhaul legislation, adding that while the current housing system is not perfect, it is working for credit unions.

"Since the financial crisis, credit unions have benefited from fair pricing and continued access," she said. "Ultimately we believe that narrowly tailored—rather than broad—reforms to the housing system likely will assist our members the most."

Sen. Mark Warner (D-Va.) said that during two days of hearings, there appears to be a broad agreement on a federal guarantor in housing.

Hunt said that Congress should not mandate a minimum down payment percentage in any legislation, adding that could be mandated by a regulator based on fluctuations in the housing market.

And she said that there is a need for an independent federal housing regulator.

Hunt said that Crapo's outline would allow multiple guarantors, a move that could increase risk and cost to the system, as guarantors jockey for market value.

"A multiple system creates a lot of uncertainty," she said, in response to a question from Brown.

She said that credit unions have established strong relationships with the housing GSEs. Those relationships have been built up over years and would be hard to replicate, she added.

Hunt said that credit unions want to be able to maintain servicing rights on their loans.

Michael Calhoun, president of the Center for Responsible Lending, said that large-scale changes to the housing system would reduce the effectiveness of the system and threaten disruption of the entire housing system.

Calhoun, whose group operates the Self-Help credit union said the current GSE system has played an essential role and supports a vibrant national housing market.