San Antonio Mayor Julian Castro was nominated by President Barack Obama to head up the Department of Housing and Urban Development on Friday. (Reuters)

President Obama has tapped San Antonio Mayor Julian Castro to lead the Department of Housing and Urban Development, a Cabinet reshuffling that would add a Hispanic to an administration that has faced criticism for not appointing more minorities to top jobs.

Castro, who drew national attention when he gave the keynote address at the 2012 Democratic National Convention, would take the spot now held by Shaun Donovan, who is set to become the next director of the Office of Management and Budget, according to Democratic officials familiar with the proposed moves. The White House is expected to announce the nominations late this week.

Donovan has led the nation’s top housing agency since the start of the Obama administration and has been rumored for years to be up for consideration for other posts. The current OMB director, Sylvia Mathews Burwell, has been nominated to be the new secretary of health and human services.

Castro, 39, is serving his third two-year term as mayor of the nation’s seventh-largest city. He and his twin brother, Joaquin Castro, a first-term Democratic congressman representing a San Antonio-area district, are rising stars in the Democratic party with a remarkable family story that resonates far beyond their home state.

The congressman is seen as a potential challenger to Sen. Ted Cruz (R-Texas) in 2018 and the mayor has been considered a potential vice presidential nominee in 2016, especially if Hillary Rodham Clinton wins the Democratic nomination for president; a Cabinet post would serve to boost his national credentials.

As Castro told the 2012 Democratic convention, the two boys grew up with their mother and their grandmother, who left her home in Mexico as an orphaned girl to live with relatives in Texas. “My grandmother spent her whole life working as a maid, a cook and a babysitter, barely scraping by, but still working hard to give my mother, her only child, a chance in life, so that my mother could give my brother and me an even better one,” he said.

After graduation from high school in San Antonio, the two brothers went to Stanford and then to Harvard Law School. As mayor, Castro has made broader access to pre-kindergarten a top priority.

Castro has been undergoing vetting by the FBI for several weeks, according to two government officials who were not authorized to discuss the process publicly. Castro had previously rejected offers from Obama to join his Cabinet but was approached again a few weeks ago about taking the HUD job.

White House spokesman Eric Schultz said Saturday that there was no personnel announcement to make “at this time.”

The addition of Castro would boost to three the number of Hispanics , the nation’s fastest-growing voter bloc, in Obama’s Cabinet. The White House has faced criticism in recent years for not appointing more minorities, especially Hispanics, to senior government jobs, given the strong support Latinos provided for Obama in 2008 and 2012.

In Obama’s second term he has tapped Thomas Perez to serve as labor secretary and Maria Contreras-Sweet to lead the Small Business Administration, which Obama has classified as a Cabinet-level agency. Energy Secretary Ernest Moniz is of Portugese descent.

The White House has also been facing stiff resistance from House Republicans to Obama’s push for changes to the nation’s immigration laws and growing pressure from Hispanic lawmakers and other immigration activists to ease the pace of deportations.

In remarks last week in San Antonio, House Speaker John A. Boehner (R-Ohio) said again that he favors a “bite-sized” legislative approach to the issue in the House, beginning with border security. But he acknowledged some of his GOP colleagues are reluctant to deal with immigration.

Donovan was commissioner of the New York City Department of Housing Preservation and Development before taking over at HUD.

David H. Stevens, who was head of the Federal Housing Administration under Donovan, called him “eminently qualified to be OMB director.”

“He’s run a complex budget as a regulator during a very stressful time, and his work on Hurricane Sandy proves he can work on complex inter-regulatory initiatives,” said Stevens, who is now chief executive of the Mortgage Bankers Association.

Dan Balz, Juliet Eilperin and Dina ElBoghdady contributed to this report.