Sponsor
Al Green
Representative · D-TX
Representative · D-TX
The bill could expand mortgage access for credit-thin borrowers and improve transparency and model evaluation, but it raises privacy concerns, financial risk to the FHA insurance fund, potential unequal access across communities, and added administrative costs.
Low- and no-credit borrowers (including many low-income individuals and middle-class families) may gain increased access to FHA-insured mortgages by opting into alternative scoring models that use additional data.
The pilot requires mortgagees to provide comparisons of pilot-model versus standard FHA scoring outcomes, giving prospective mortgagors clearer information to compare options before consenting.
HUD must publish participant lists and reports about model performance, increasing public transparency about which lenders participate and how alternative models perform.
Using additional data in credit-scoring models could expose prospective borrowers to privacy risks if sensitive personal information is collected or used.
If alternative models underprice borrower risk, loans approved via those models could increase losses to the FHA Mutual Mortgage Insurance Fund, potentially raising premiums or taxpayer exposure.
Because participation is voluntary, subject to caps, and may vary by mortgagee, access to the pilot’s potential benefits could be uneven across communities and lenders, worsening geographic or demographic disparities.
Based on analysis of 2 sections of legislative text.
Creates an FHA pilot to test commercially available credit-scoring models using additional data, requires HUD notices and borrower opt-in and comparison disclosures.
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 15, 2026 by Al Green · Last progress April 15, 2026
Creates a formal FHA pilot program to test commercially available credit-scoring models that use additional (alternative) data for borrowers with limited credit history. HUD must run the pilot, let eligible borrowers opt in, give clear written notice explaining how the pilot model differs and listing housing counseling agencies, and let prospective borrowers compare likely outcomes under the pilot versus FHA’s existing model; HUD must select one or more models within one year after consulting GNMA and following regulatory criteria. The change narrows participation to borrowers who elect the pilot, prohibits using the pilot scoring to refinance payoffs of existing loans on the same property, preserves existing borrower protections, and redesignates related statutory subsections to fit the new pilot structure.