IB 

Union Calendar No. 547 

116TH CONGRESS 

2D SESSION H. R. 123 

[Report No. 116–663] 

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 3, 2019 

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

Committee on Financial Services 

DECEMBER 17, 2020 

Additional sponsors: Mr. SHERMAN and Mr. CLEAVER

DECEMBER 17, 2020 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on January 3, 2019] 


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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. 


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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’’. 

7 SEC. 2. PILOT PROGRAM FOR BORROWERS WITHOUT SUFFI8 CIENT CREDIT HISTORY. 

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

10 1715z–24) is amended— 

11 (1) in subsection (a)— 

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

13 ‘‘establish and carry out’’; 

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

15 (C) by inserting ‘‘who elect to participate in 

16 the pilot program’’ before the second comma; 

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

18 (E) by inserting after ‘‘their creditworthi19 ness’’ the following: ‘‘and have opted into the use 

20 of additional credit information’’; and 

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

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

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

24 at the end the following: ‘‘The pilot program may not 

25 be carried out with respect to any mortgagor or proVerDate Sep 11 2014 22:17 Dec 17, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H123.RH H123

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1 spective mortgagor under a mortgage the proceeds of 

2 which are used to prepay or pay off an existing loan 

3 secured by the same property.’’; 

4 (3) by striking subsection (c); 

5 (4) by redesignating subsections (b) (as amended 

6 by paragraph (2) of this subsection) and (d) as sub7 sections (c) and (k), respectively; 

8 (5) by inserting after subsection (a) the following 

9 new subsection: 

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

11 section shall be to examine and evaluate the benefits of 

12 using such a credit scoring model that uses additional 

13 data.’’; 

14 (6) by inserting after subsection (c) (as so redes15 ignated by paragraph (4) of this subsection) the fol16 lowing: 

17 ‘‘(d) ADDITIONAL CREDIT INFORMATION.—The Sec18 retary shall, after consultation with the Government Na19 tional Mortgage Association and not later than one year 

20 after the date of the enactment of this subsection, select one 

21 or more commercially available credit scoring models that 

22 will be available under the pilot and that utilize additional 

23 data, as the Secretary considers appropriate based on the 

24 goals of the pilot program. In selecting the model or models 

25 to use, the Secretary shall consider the criteria under part 


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1 1254 of the regulations of the Director of the Federal Hous2 ing Finance Agency (12 C.F.R. Part 1254) to the extent 

3 appropriate. 

4 ‘‘(e) NOTIFICATION.— 

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

6 develop a notice for prospective mortgagors, and re7 quire mortgagees to provide such notice to prospective 

8 mortgagors, that informs prospective mortgagors of— 

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

10 credit scoring model selected for use under the 

11 pilot program; 

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

13 credit scoring model differs from the FHA’s cur14 rent credit scoring models, including the types of 

15 additional data that are included in the pilot 

16 program model; and 

17 ‘‘(C) housing counseling agencies in the 

18 area that are approved by the Department of 

19 Housing and Urban Development. 

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

21 Secretary shall require mortgagees participating in 

22 the pilot program to provide information to prospec23 tive mortgagors sufficient to allow comparison of the 

24 mortgagor’s lending options using the credit scoring 

25 model under the pilot program and using the credit 


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1 scoring model then in effect for mortgagors not opting 

2 into the use of the credit scoring model under the pilot 

3 program. 

4 ‘‘(f) UNDERWRITING OPTIONS.—This section may not 

5 be construed to preclude a prospective mortgagor who opts 

6 to use an approved credit scoring model under the pilot pro7 gram under this subsection in connection with under8 writing for a mortgage insured under this title from there9 after obtaining a determination of creditworthiness in10 volved in underwriting for such mortgage using informa11 tion other than that provided under such approved credit 

12 scoring model. 

13 ‘‘(g) PROTECTION OF PROPRIETARY INFORMATION.— 

14 This section may not be construed to require the disclosure 

15 or sharing of any proprietary information. 

16 ‘‘(h) REPORTING.— 

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

18 reports to the Congress in accordance with paragraph 

19 (2) that provide a detailed evaluation of the effective20 ness of the pilot, including data that shows— 

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

22 option to opt into using additional credit infor23 mation and the number of mortgagors who opted 

24 into using additional credit information; 


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1 ‘‘(B) the total number and percent of mort2 gagors who opted into the pilot and were subse3 quently approved for a mortgage; 

4 ‘‘(C) demographic information about mort5 gagors who opt into using additional credit in6 formation, compared to demographic informa7 tion about mortgagors generally, which shall in8 clude race, ethnicity, marital status, sex or gen9 der, geographic location regarding mortgaged 

10 properties, and any other information the Sec11 retary deems appropriate; 

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

13 thin credit files benefitted from having this op14 tion and how; 

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

16 did not have thin or no credit files benefitted 

17 from this option and how; 

18 ‘‘(F) the effectiveness of the additional credit 

19 information in predicting mortgage loan default; 

20 ‘‘(G) the rate of participation of mortgagees 

21 in the pilot program; 

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

23 an impact on the Mutual Mortgage Insurance 

24 Fund, in general, and specifically whether it had 


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1 an impact on the economic net worth ratio of the 

2 Fund; 

3 ‘‘(I) whether or not there was sufficient in4 come from the pilot program to offset the risk 

5 posed to such Fund by the pilot program; 

6 ‘‘(J) whether the pilot program had an im7 pact on the ability of other borrowers not par8 ticipating in the program to obtain the products 

9 and services of the FHA; and 

10 ‘‘(K) any other information the Secretary 

11 determines relevant. 

12 ‘‘(2) SUBMISSION.—The Secretary shall submit a 

13 report described in paragraph (1)— 

14 ‘‘(A) not later than 6 months after the con15 clusion of the 2-year period beginning on the 

16 date on which the Secretary begins accepting the 

17 additional credit scores through the pilot pro18 gram established by the Secretary pursuant to 

19 this section; and 

20 ‘‘(B) not later than 1 year after the conclu21 sion of the 5-year period beginning on the date 

22 of the enactment of the Alternative Data for Ad23 ditional Credit FHA Pilot Program Reauthor24 ization Act. 


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1 ‘‘(3) REPORT ON SELECTION OF ADDITIONAL

2 CREDIT MODEL.—Not later than the conclusion of the 

3 6-month period that begins upon the conclusion of the 

4 one-year period under subsection (d), the Secretary 

5 shall submit to the Congress a report explaining why 

6 the additional credit scoring model or models selected 

7 pursuant to subsection (d) were selected in lieu of 

8 other commercially available credit scoring models. 

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

10 The Secretary shall make publicly available in an 

11 easily accessible location on the website of the Depart12 ment— 

13 ‘‘(A) each report submitted to the Congress 

14 pursuant to this subsection; and 

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

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

17 mortgagees participating in the pilot program. 

18 ‘‘(i) AUTHORITY TO LIMIT PARTICIPATION.—The Sec19 retary may establish a limitation to cap participation in 

20 the pilot program under this section. 

21 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There is 

22 authorized to be appropriated— 

23 ‘‘(1) $3,000,000 for fiscal year 2020 for estab24 lishing and carrying out the pilot program under this 

25 section; and 


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1 ‘‘(2) $1,500,000 for each of fiscal years 2021 

2 through 2024 for carrying out the pilot program 

3 under this section.’’; and 

4 (7) in subsection (k), as so redesignated by para5 graph (4), by striking ‘‘5-year period beginning on 

6 the date of the enactment of the Building American 

7 Homeownership Act of 2008’’ and inserting ‘‘5-year 

8 period beginning on the date of the enactment of the 

9 Alternative Data for Additional Credit FHA Pilot 

10 Program Reauthorization Act’’. 


pamtmann on DSKBC07HB2PROD with BILLS

pamtmann on DSKBC07HB2PROD with BILLS
Union Calendar No. 547 

116TH CONGRESS 

2D SESSION H. R. 123 

[Report No. 116–663] 

A BILL 

To authorize a pilot program under section 258 of 

mortgagors under certain mortgages. ing information for mortgagors and prospective mated process for providing additional credit ratthe National Housing Act to establish an autoDECEMBER 17, 2020 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pamtmann on DSKBC07HB2PROD with BILLS