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119-hr-8292119th CongressWALLET

Original Alternative Data for Additional Credit FHA Pilot Program Reauthorization Act

Sponsored By: Representative Green, Al [D-TX-9]

Introduced

Summary

A pilot to test using additional credit data in FHA underwriting would let selected borrowers opt into credit scoring models that include extra financial and nontraditional information. The bill sets opt-in rules, privacy limits, lender disclosure requirements, and a public reporting schedule to evaluate whether additional data improves access and predicts mortgage risk.

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  • Households and prospective homebuyers: Eligible mortgagors could choose a credit score that uses additional data. HUD must give clear notices about how the pilot model differs and list approved housing counseling agencies.
  • Mortgage lenders and loan servicers: Mortgagees in the pilot must provide prospective borrowers with side-by-side comparisons of underwriting outcomes and HUD will publish which lenders participate and their participation rates.
  • HUD, FHA, and oversight: The Secretary must select one or more commercially available models after one year in consultation with the Government National Mortgage Association and report to Congress on opt-ins, approvals, demographics, default prediction effectiveness, and any impact on the Mutual Mortgage Insurance Fund and its net worth ratio. Reports are required after a 2-year data period and again after 5 years.

*Would authorize $3.0 million for FY2023 and $1.5 million annually for FY2024 through FY2027 to carry out the pilot, increasing federal outlays by those amounts.*

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

Pilot reporting and funding for HUD

If enacted, HUD would report detailed pilot results to Congress and post the reports publicly. Required items include counts of who was offered and who opted in, opt-in approval rates, demographic comparisons, whether thin- or no‑file borrowers benefited, how well additional data predicted defaults, lender participation rates, and any impact on the Mutual Mortgage Insurance Fund. HUD would post an up-to-date list of participating mortgagees. The bill would authorize $3 million for FY2023 and $1.5 million per year for FY2024–FY2027 to establish and run the pilot. Actual spending would depend on later appropriations.

Optional FHA pilot using extra data

If enacted, HUD would run a pilot to test credit scoring models that use additional data. The pilot would apply only to mortgagors and prospective mortgagors who elect to opt in. The Secretary could limit how many people join and could not use the pilot for mortgages whose proceeds repay an existing loan on the same property. A borrower who opts in could still get a creditworthiness decision using other information. HUD would pick one or more commercial models within one year and must give borrowers a notice that explains how the pilot model differs and lists HUD‑approved housing counselors. The section would not force firms to disclose proprietary model data.

Sponsors & CoSponsors

Sponsor

Green, Al [D-TX-9]

TX • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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