Original Alternative Data for Additional Credit FHA Pilot Program Reauthorization Act
- Bill Number
- H.R. 8292
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-04-15: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-04-22T16:20:09Z
AI-Generated Summary
Purpose
This bill, titled the Original Alternative Data for Additional Credit FHA Pilot Program Reauthorization Act, reauthorizes and expands a pilot program under section 258 of the National Housing Act. The program tests an automated system to use additional credit information (beyond traditional credit scores) to assess creditworthiness for FHA-insured mortgages, especially for borrowers with limited or no conventional credit history. The goal is to evaluate if this approach improves access to home loans and predicts loan performance better.
Key Provisions
- Pilot Program Setup: HUD Secretary must establish and carry out the program for borrowers who opt in and lack sufficient traditional credit data.
- Credit Models: Within 1 year of enactment, select one or more commercial credit scoring models using additional data, after consulting the Government National Mortgage Association (GNMA); consider Federal Housing Finance Agency criteria.
- Notifications and Options:
- Lenders must inform prospective borrowers about opting in, how the new model differs (e.g., types of extra data), and local HUD-approved housing counseling agencies.
- Provide comparisons of loan options using the pilot model vs. standard FHA models.
- Protections and Flexibility:
- Borrowers can still use other underwriting methods after opting in.
- No requirement to share proprietary (private business) information.
- Program excludes mortgages used to prepay or pay off existing loans on the same property.
- Reporting Requirements:
- Detailed Congress reports (at 2 years and 5 years post-start) on participation rates, approvals, demographics (race, ethnicity, etc.), default predictions, impacts on the Mutual Mortgage Insurance Fund, and more.
- Report on model selection within 18 months.
- Public website posting of reports and participant lender list.
- Other Details:
- HUD can cap participation.
- Authorizes $3 million (FY 2023) and $1.5 million annually (FY 2024–2027).
- Runs for 5 years from enactment.
Significant Changes to Existing Law
- Replaces "alternative" with "additional" credit data throughout.
- Adds explicit goal to evaluate benefits of extra data models.
- Inserts new subsections (b)–(j) for model selection, notifications, protections, reporting, and funding.
- Strikes old subsection (c); redesignates others.
- Updates program sunset from the 2008 Building American Homeownership Act to this new act.
- Adds opt-in requirement and prepayment exclusion.
Potential Impacts
- Borrowers: May increase FHA mortgage approvals for those with "thin" (limited) or no credit files, potentially expanding homeownership for underserved groups.
- Government: Tests if extra data reduces defaults and protects the FHA's Mutual Mortgage Insurance Fund (which insures loans); requires new reporting and funding.
- Lenders: Must participate optionally, provide notices/comparisons, and face participation caps.
- Housing Market: Could broaden credit access without mandating changes to standard FHA processes.
Main Stakeholders Affected
- Prospective FHA Borrowers: Especially those with limited traditional credit (e.g., immigrants, young buyers, or cash-based workers).
- HUD/FHA: Oversees program, model selection, and reporting.
- Mortgage Lenders (Mortgagees): Provide notices, comparisons; optional participants.
- Congress: Receives evaluations to assess program success.
- Housing Counseling Agencies: Referenced for borrower support.
- GNMA and Fund Stakeholders: Involved in consultations and fund impact monitoring.
Notable Legal, Constitutional, or Political Implications
- Legal: Amends the National Housing Act (12 U.S.C. 1715z-24) to modernize credit evaluation; emphasizes voluntary opt-in and data protections to avoid privacy issues.
- Constitutional: No direct challenges; focuses on federal housing policy execution.
- Political: Promotes homeownership equity by testing inclusive credit tools; requires demographic data for fairness analysis, with public transparency to build accountability.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-04-15: Referred to the House Committee on Financial Services.
- 2026-04-15: Introduced in House
- 2026-04-15: Introduced in House
Bill Versions
- Original Alternative Data for Additional Credit FHA Pilot Program Reauthorization Act — issued 2026-04-15 — PDF (9 pages)