By Rachelle Younglai

WASHINGTON (Reuters) - The Senate on Thursday backed a measure to help bolster the housing market by making it easier for people to afford a home in wealthier neighborhoods.

The Senate voted 60-38 to attach the proposal to a spending bill that the chamber will consider later this year. It would restore the size of the loans the government buys or insures to a maximum of $729,500 from the previous cap of $625,500.

The cap, known as the "conforming loan limit," determines the maximum size of loans the Federal Housing Administration and the government's mortgage buyers, Fannie Mae and Freddie Mac, can buy or guarantee.

The higher loan limit expired at the end of September and was touted as one of the Obama administration's short-term plans to shrink the government's role in the mortgage market.

But with the housing sector hurting the country's economic recovery, lawmakers and the administration are looking for solutions.

"Getting our housing market moving again is one of the most important tasks facing the country," said Robert Menendez, a Democrat from New Jersey who introduced the bill amendment.

The majority of Senators agreed that the lower loan limit was making a weak housing market even weaker. "It makes it harder for middle class homebuyers to get credit when credit is tight," Menendez said.

It is unclear what will ultimately happen to the provision, given the deep divisions within the Democratic-led Senate and Republican-controlled House of Representatives. It would have to pass both chambers before President Barack Obama, a Democrat, could sign it into law.

Republican Senator Richard Shelby said the measure would help homebuyers who "do not need federal subsidies." "This is not a good use of taxpayer dollars," he said.

Republicans in the House have been trying to quickly unwind Fannie Mae and Freddie Mac, which were seized by the government at the height of the financial crisis and now back the bulk of the mortgage market. But the administration has cautioned against removing the government's support before the housing sector starts to stabilize.