Sponsor
Al Green
Representative · D-TX
Representative · D-TX
The bill could expand mortgage access for thin-file borrowers and improve risk prediction while increasing transparency, but it raises privacy concerns, could expose the FHA insurance fund and taxpayers to greater financial risk, and may produce uneven access and administrative costs.
Low-credit or thin-file prospective borrowers (low-income individuals and middle-class families) may gain access to FHA-insured mortgages by opting into alternative credit-scoring models that use additional data.
If effective, the pilot’s targeted evaluation could identify models that better predict default risk, helping protect the Mutual Mortgage Insurance Fund and reducing losses for homeowners and taxpayers.
Borrowers can see and compare outcomes: mortgagees must provide information comparing pilot-model results versus FHA scoring for nonparticipants, giving prospective mortgagors clearer information about eligibility and impacts.
Borrowers (including people with disabilities) face increased privacy risks because alternative scoring may use additional or sensitive data that could be exposed or misused.
If alternative models underprice credit risk, the FHA’s Mutual Mortgage Insurance Fund could incur greater losses, potentially leading to higher premiums or taxpayer exposure.
Because participation is voluntary, capped, and may be uneven across mortgagees, access to the pilot’s potential benefits could be unequal across geographies and demographic groups, disadvantaging low-income, racial-ethnic minority, and rural borrowers.
Based on analysis of 2 sections of legislative text.
Requires HUD to run an FHA pilot testing commercially available credit scoring models that use additional data, with opt-in notices and comparative disclosures for borrowers.
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, and requires HUD to select models, provide notices, and ensure borrowers can opt in and compare outcomes. The bill narrows participation to those who elect to join, forbids using the pilot to facilitate payoff/prepayment of existing loans on the same property, and sets a one-year timeline for HUD to select pilot models after enactment following consultation with GNMA. Requires mortgagees to deliver a written HUD notice explaining pilot options, how the pilot model differs from FHA’s current scoring model (including what additional data are used), and HUD-approved local housing counseling agencies; mortgagees in the pilot must also give prospective borrowers comparative information on lending outcomes under the pilot vs. the standard FHA model.