This bill authorizes a pilot program within the Federal Housing Administration to test a new automated process for evaluating creditworthiness using additional credit information beyond traditional credit scores. The program would be voluntary, allowing prospective homebuyers and current borrowers to opt in and be evaluated using alternative credit scoring models that incorporate additional data sources, which could help people with little or no credit history access FHA-insured mortgages. The bill excludes borrowers using the program to refinance or pay off existing loans on the same property. The Secretary of Housing and Urban Development must select approved credit scoring models within one year and establish clear notification procedures so borrowers understand their options and can compare lending terms. The bill requires detailed reporting to Congress on the program's effectiveness, including data on participation rates, approval outcomes, demographic information, default rates, and impacts on the FHA insurance fund, with reports due at 2.5 years and 5 years after the program begins. The legislation authorizes $3 million for fiscal year 2023 to establish the pilot and $1.5 million annually for fiscal years 2024 through 2027 to operate it.
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