I 

118TH CONGRESS 

1ST SESSION H. R. 123 

To authorize a pilot program under section 258 of the National Housing 

Act to establish an automated process for providing additional credit 

rating information for mortgagors and prospective mortgagors under 

certain mortgages. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 9, 2023 

Mr. GREEN of Texas introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To authorize a pilot program under section 258 of the National Housing Act to establish an automated process 

for providing additional credit rating information for 

mortgagors and prospective mortgagors under certain 

mortgages. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Alternative Data for 

5 Additional Credit FHA Pilot Program Reauthorization 

6 Act’’. 


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1 SEC. 2. PILOT PROGRAM FOR BORROWERS WITHOUT SUF2 FICIENT CREDIT HISTORY. 

3 Section 258 of the National Housing Act (12 U.S.C. 

4 1715z–24) is amended— 

5 (1) in subsection (a)— 

6 (A) by striking ‘‘carry out’’ and inserting 

7 ‘‘establish and carry out’’; 

8 (B) by striking ‘‘establish, and’’; 

9 (C) by inserting ‘‘who elect to participate 

10 in the pilot program’’ before the second comma; 

11 (D) by striking ‘‘mortgagors and’’; 

12 (E) by inserting after ‘‘their creditworthi13 ness’’ the following: ‘‘and have opted into the 

14 use of additional credit information’’; and 

15 (F) by striking ‘‘alternative’’ each place 

16 such term appears and inserting ‘‘additional’’; 

17 (2) in subsection (b), by adding after the period 

18 at the end the following: ‘‘The pilot program may 

19 not be carried out with respect to any mortgagor or 

20 prospective mortgagor under a mortgage the pro21 ceeds of which are used to prepay or pay off an ex22 isting loan secured by the same property.’’; 

23 (3) by striking subsection (c); 

24 (4) by redesignating subsections (b) (as amend25 ed by paragraph (2) of this subsection) and (d) as 

26 subsections (c) and (k), respectively; 


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1 (5) by inserting after subsection (a) the fol2 lowing new subsection: 

3 ‘‘(b) GOAL.—The goal of the pilot program under 

4 this section shall be to examine and evaluate the benefits 

5 of using such a credit scoring model that uses additional 

6 data.’’; 

7 (6) by inserting after subsection (c) (as so re8 designated by paragraph (4) of this subsection) the 

9 following: 

10 ‘‘(d) ADDITIONAL CREDIT INFORMATION.—The Sec11 retary shall, after consultation with the Government Na12 tional Mortgage Association and not later than one year 

13 after the date of the enactment of this subsection, select 

14 one or more commercially available credit scoring models 

15 that will be available under the pilot and that utilize addi16 tional data, as the Secretary considers appropriate based 

17 on the goals of the pilot program. In selecting the model 

18 or models to use, the Secretary shall consider the criteria 

19 under part 1254 of the regulations of the Director of the 

20 Federal Housing Finance Agency (12 C.F.R. Part 1254) 

21 to the extent appropriate. 

22 ‘‘(e) NOTIFICATION.— 

23 ‘‘(1) NOTICE OF OPTIONS.—The Secretary shall 

24 develop a notice for prospective mortgagors, and re25 quire mortgagees to provide such notice to prospecVerDate Sep 11 2014 00:17 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H123.IH H123

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1 tive mortgagors, that informs prospective mortga2 gors of— 

3 ‘‘(A) the ability to opt into the use of the 

4 credit scoring model selected for use under the 

5 pilot program; 

6 ‘‘(B) information on how the pilot program 

7 credit scoring model differs from the FHA’s 

8 current credit scoring models, including the 

9 types of additional data that are included in the 

10 pilot program model; and 

11 ‘‘(C) housing counseling agencies in the 

12 area that are approved by the Department of 

13 Housing and Urban Development. 

14 ‘‘(2) COMPARISON OF LENDING OPTIONS.—The 

15 Secretary shall require mortgagees participating in 

16 the pilot program to provide information to prospec17 tive mortgagors sufficient to allow comparison of the 

18 mortgagor’s lending options using the credit scoring 

19 model under the pilot program and using the credit 

20 scoring model then in effect for mortgagors not opt21 ing into the use of the credit scoring model under 

22 the pilot program. 

23 ‘‘(f) UNDERWRITING OPTIONS.—This section may 

24 not be construed to preclude a prospective mortgagor who 

25 opts to use an approved credit scoring model under the 


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1 pilot program under this subsection in connection with un2 derwriting for a mortgage insured under this title from 

3 thereafter obtaining a determination of creditworthiness 

4 involved in underwriting for such mortgage using informa5 tion other than that provided under such approved credit 

6 scoring model. 

7 ‘‘(g) PROTECTION OF PROPRIETARY INFORMA8 TION.—This section may not be construed to require the 

9 disclosure or sharing of any proprietary information. 

10 ‘‘(h) REPORTING.— 

11 ‘‘(1) IN GENERAL.—The Secretary shall submit 

12 reports to the Congress in accordance with para13 graph (2) that provide a detailed evaluation of the 

14 effectiveness of the pilot, including data that 

15 shows— 

16 ‘‘(A) the number of mortgagors who had 

17 the option to opt into using additional credit in18 formation and the number of mortgagors who 

19 opted into using additional credit information; 

20 ‘‘(B) the total number and percent of 

21 mortgagors who opted into the pilot and were 

22 subsequently approved for a mortgage; 

23 ‘‘(C) demographic information about mort24 gagors who opt into using additional credit in25 formation, compared to demographic informaVerDate Sep 11 2014 00:17 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H123.IH H123

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1 tion about mortgagors generally, which shall in2 clude race, ethnicity, marital status, sex or gen3 der, geographic location regarding mortgaged 

4 properties, and any other information the Sec5 retary deems appropriate; 

6 ‘‘(D) whether or not mortgagors with no or 

7 thin credit files benefitted from having this op8 tion and how; 

9 ‘‘(E) whether or not other borrowers who 

10 did not have thin or no credit files benefitted 

11 from this option and how; 

12 ‘‘(F) the effectiveness of the additional 

13 credit information in predicting mortgage loan 

14 default; 

15 ‘‘(G) the rate of participation of mortga16 gees in the pilot program; 

17 ‘‘(H) whether or not the pilot program had 

18 an impact on the Mutual Mortgage Insurance 

19 Fund, in general, and specifically whether it 

20 had an impact on the economic net worth ratio 

21 of the Fund; 

22 ‘‘(I) whether or not there was sufficient in23 come from the pilot program to offset the risk 

24 posed to such Fund by the pilot program; 


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1 ‘‘(J) whether the pilot program had an im2 pact on the ability of other borrowers not par3 ticipating in the program to obtain the products 

4 and services of the FHA; and 

5 ‘‘(K) any other information the Secretary 

6 determines relevant. 

7 ‘‘(2) SUBMISSION.—The Secretary shall submit 

8 a report described in paragraph (1)— 

9 ‘‘(A) not later than 6 months after the 

10 conclusion of the 2-year period beginning on the 

11 date on which the Secretary begins accepting 

12 the additional credit scores through the pilot 

13 program established by the Secretary pursuant 

14 to this section; and 

15 ‘‘(B) not later than 1 year after the con16 clusion of the 5-year period beginning on the 

17 date of the enactment of the Alternative Data 

18 for Additional Credit FHA Pilot Program Re19 authorization Act. 

20 ‘‘(3) REPORT ON SELECTION OF ADDITIONAL

21 CREDIT MODEL.—Not later than the conclusion of 

22 the 6-month period that begins upon the conclusion 

23 of the 1-year period under subsection (d), the Sec24 retary shall submit to the Congress a report explain25 ing why the additional credit scoring model or modVerDate Sep 11 2014 00:17 Jan 18, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H123.IH H123

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1 els selected pursuant to subsection (d) were selected 

2 in lieu of other commercially available credit scoring 

3 models. 

4 ‘‘(4) PUBLIC AVAILABILITY OF INFORMATION.— 

5 The Secretary shall make publicly available in an 

6 easily accessible location on the website of the De7 partment— 

8 ‘‘(A) each report submitted to the Con9 gress pursuant to this subsection; and 

10 ‘‘(B) information about the pilot program, 

11 which shall include an up-to-date listing of 

12 mortgagees participating in the pilot program. 

13 ‘‘(i) AUTHORITY TO LIMIT PARTICIPATION.—The 

14 Secretary may establish a limitation to cap participation 

15 in the pilot program under this section. 

16 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 

17 is authorized to be appropriated— 

18 ‘‘(1) $3,000,000 for fiscal year 2023 for estab19 lishing and carrying out the pilot program under 

20 this section; and 

21 ‘‘(2) $1,500,000 for each of fiscal years 2024 

22 through 2027 for carrying out the pilot program 

23 under this section.’’; and 

24 (7) in subsection (k), as so redesignated by 

25 paragraph (4), by striking ‘‘5-year period beginning 


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1 on the date of the enactment of the Building Amer2 ican Homeownership Act of 2008’’ and inserting ‘‘5- 

3 year period beginning on the date of the enactment 

4 of the Alternative Data for Additional Credit FHA 

5 Pilot Program Reauthorization Act’’. 

Æ 


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