Sponsor
Al Green
Representative · D-TX
Representative · D-TX
The bill could expand mortgage access for credit-invisible borrowers and provide policymakers with data, at the cost of added compliance expenses and a risk of greater defaults and losses to the FHA fund if alternative scoring performs worse or uptake among target borrowers is limited.
Low-income individuals and borrowers with thin or no credit files may gain access to FHA-backed mortgages by opting into alternative-data scoring pilots, increasing homeownership opportunities.
Taxpayers and policymakers receive required public reports on pilot participation, approval rates, demographic impacts, and effects on the FHA Mutual Mortgage Insurance Fund, improving oversight and evidence for future policy decisions.
Prospective mortgagors get clearer notices and counseling resources that help them compare standard scoring to pilot scoring and make more informed borrowing decisions.
Taxpayers and middle-class families could bear higher costs if alternative-data models perform worse than standard models and increase mortgage defaults, harming the FHA Mutual Mortgage Insurance Fund.
Mortgage lenders and model vendors (and potentially borrowers indirectly) will incur compliance and operational costs to implement opt-in procedures, notices, and side-by-side comparisons, which can raise transaction costs or be passed through to borrowers.
Low-income individuals and borrowers with thin credit files may not opt into the pilot because of lack of awareness or distrust, limiting uptake and reducing the program's effectiveness for the intended populations.
Based on analysis of 2 sections of legislative text.
Authorizes an FHA pilot to test commercially available credit-scoring models that use additional data for borrowers lacking traditional credit histories, with borrower opt-in, notices, comparisons, and required reports to Congress.
Official title: To authorize a pilot program under section 258 of the National Housing Act to establish an automated process for providing additional credit rating information for mortgagors and prospective mortgagors under certain mortgages.
Introduced April 16, 2026 by Al Green · Last progress April 16, 2026
Creates a formal FHA pilot program to evaluate commercially available credit scoring models that use additional, nontraditional data for borrowers who lack sufficient credit history. The pilot requires borrower opt-in, written notice and side-by-side comparisons of outcomes, preserves other underwriting rights, and obliges HUD to report participation and results to Congress within specified timelines. Implements procedural steps for the Secretary of HUD to select one or more pilot scoring models within one year, consult with Ginnie Mae, consider FHFA criteria, protect proprietary information, and provide consumer-facing disclosures and links to HUD-approved housing counseling agencies.