Original Additional Credit FHA Pilot Program Authorization Act
- Bill Number
- H.R. 8318
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-04-16: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-04-22T16:20:16Z
AI-Generated Summary
Purpose
This bill authorizes and expands a pilot program under the Federal Housing Administration (FHA, a government agency that insures home loans to make them more accessible) to test automated credit scoring models that use additional data beyond traditional credit reports. The goal is to help borrowers with limited or no credit history (called "thin" or "no" credit files) qualify for FHA-insured mortgages by giving them the option to include extra information, like rent or utility payments, in their credit evaluation.
Key Provisions
- Eligibility and Opt-In: Limited to prospective homebuyers who voluntarily elect to participate and opt into using additional credit data. Excludes mortgages used to refinance or pay off existing loans on the same property.
- Credit Model Selection: U.S. Department of Housing and Urban Development (HUD) Secretary must select one or more commercial credit scoring models within 1 year (after consulting Ginnie Mae, which supports mortgage-backed securities). Selection considers standards from the Federal Housing Finance Agency.
- Notifications and Transparency:
- Lenders must provide notices explaining the pilot, how it differs from standard FHA scoring (including types of extra data used), and local HUD-approved housing counseling options.
- Borrowers get comparisons of loan options using pilot vs. standard scoring.
- Flexibility and Protections:
- Borrowers can still use other credit evaluation methods if they opt in.
- No requirement to share proprietary (private company-owned) information.
- Reporting Requirements:
- HUD submits detailed reports to Congress at 2 years and 5 years after pilot start, plus a 6-month report on model selection.
- Reports cover participation numbers, demographics (race, ethnicity, gender, location), benefits for thin/no-credit borrowers vs. others, default prediction accuracy, lender participation, impacts on the Mutual Mortgage Insurance Fund (MMIF, the FHA's financial reserve for loan defaults), and more.
- Reports and pilot info (e.g., participating lenders) posted publicly on HUD's website.
- Oversight: HUD can cap program participation; pilot lasts 5 years from enactment.
- Funding: Authorizes $3 million for fiscal year 2023 and $1.5 million annually for 2024–2027.
Significant Changes to Existing Law
- Amends Section 258 of the National Housing Act (from a 2008 pilot using "alternative" credit) by shifting to "additional" credit data, emphasizing opt-in for those lacking sufficient traditional credit.
- Adds new subsections for goals, model selection, notifications, protections, detailed reporting, and funding—replacing or striking prior vague language.
- Updates pilot sunset from 2008 to this bill's enactment date.
Potential Impacts
- Citizens: May increase homeownership access for underserved groups (e.g., young buyers, immigrants, gig workers) with thin credit files by incorporating non-traditional data, while standard options remain available.
- Government Agencies: HUD/FHA must implement, monitor risks to MMIF (e.g., via economic net worth ratio), and report extensively; could inform future permanent changes if successful.
- Lenders: Voluntary participation with notification duties; potential for more approved loans but added reporting.
- No direct international relations impact.
Main Stakeholders
- Prospective Borrowers: Especially those with limited credit histories.
- Lenders (Mortgagees): Must notify and compare options if participating.
- HUD/FHA: Leads implementation, model selection, and evaluation.
- Congress: Receives reports for oversight.
- Housing Counseling Agencies: Referenced for borrower support.
- Ginnie Mae and Credit Model Providers: Consulted or selected for technical input.
Notable Legal, Constitutional, or Political Implications
- Legal: Builds on existing FHA authority with strong opt-in protections, demographic reporting (to assess equity without mandates), and MMIF safeguards to limit financial risk.
- Constitutional: No apparent issues; voluntary program respects due process and equal protection via opt-in and comparisons.
- Political: Promotes homeownership expansion for credit-challenged groups through testing, with built-in evaluation to ensure fiscal responsibility—no automatic expansion.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-04-16: Referred to the House Committee on Financial Services.
- 2026-04-16: Introduced in House
- 2026-04-16: Introduced in House
Bill Versions
- Original Additional Credit FHA Pilot Program Authorization Act — issued 2026-04-16 — PDF (9 pages)