WASHINGTON — President Obama said Friday that he intends to nominate San Antonio mayor Julian Castro to be the next secretary of the Department of Housing and Urban Development.

The nomination of the 39-year-old mayor to the post also gives the president the opportunity to move current HUD Secretary Shaun Donovan over to the White House Office of Management and Budget.

During his announcement, the president credited Castro with revitalizing San Antonio by creating thousands of housing units downtown and attracting hundreds of millions of dollars of investment.

"He has built relationships with mayors all across the country and has become a leader in housing and economic development," Obama said.

Democratic allies are hoping that, once confirmed, Castro will focus on increasing affordable housing and making mortgage-credit more available to first-time homebuyers.

Mortgage consultant Brian Chappelle said he expects Castro will focus on making Federal Housing Administration-insured single family loans more accessible to homebuyers.

"It is obvious to me that expanding homeownership will be a key element of the new secretary's agenda," he said. Chappelle is a co-founder of Potomac Partners in Washington.

Kevin Kelly, the chairman of the National Association of Home Builders, said the group hopes Castro will focus on easing credit standards.

"NAHB looks forward to working with Mr. Castro to promote policies that will ensure stable and liquid mortgage markets for single-family and multifamily housing and to address the many challenges that face our industry, including persistently tight credit conditions that are preventing qualified buyers from obtaining home loans," he said.

The White House on Friday highlighted Castro's credentials and housing experience.

Since his election in May 2009, Castro has "focused a laser on urban core revitalization through the Decade of Downtown initiative," according to White House talking points. "This project has helped San Antonio avoid the 'doughnut hole' of decay that plagues many major American cities. Due to this effort, 2,463 housing units will rise in downtown San Antonio by the end of 2014, sparking $349.8 million in total investment."

Industry groups, meanwhile, also praised Donovan, saying he'd worked closely with them on some tough issues. Joe Ventrone, the director of government affairs for the National Association of Realtors, said Donovan did "yeoman service" in getting the banking regulators to agree on a workable qualified residential mortgage rule that would govern the issuance of private label mortgage securities.

"Shaun also provided great leadership" on the National Mortgage Settlement, Ventrone said.

Under the settlement, five mega-servicers agreed to provide $25 billion in relief for troubled borrowers to prevent foreclosures.

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