This bill reauthorizes and expands a Federal Housing Administration pilot program that allows borrowers to opt into using alternative credit scoring models that incorporate additional credit information beyond traditional credit scores. The program is designed to help borrowers with limited credit histories or "thin credit files" demonstrate their creditworthiness for FHA-insured mortgages. The Secretary of Housing and Urban Development must select one or more commercially available credit scoring models within one year and establish a process to notify prospective borrowers of their option to participate, while also providing comparisons of lending terms under both the pilot model and standard FHA models. The legislation requires detailed reporting to Congress on program effectiveness, including data on borrower participation rates, approval rates, demographic information, and whether the program affects loan default rates and the FHA's insurance fund. The bill authorizes $3 million for fiscal year 2023 and $1.5 million annually for fiscal years 2024 through 2027 to establish and operate the pilot program, with an initial five-year evaluation period.
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