FHA Credit Scoring Pilot Reauthorization: Using Additional Data for Mortgages.
This Act reauthorizes and amends an FHA pilot program designed to help individuals with limited or no credit history qualify for mortgages. The program allows lenders to use 'additional data' (beyond traditional credit reports) for creditworthiness assessment, potentially expanding homeownership opportunities for more citizens. Participation is voluntary, requiring borrowers to opt-in to the use of this supplementary information.
Key points
Expanded Mortgage Access: The pilot program permits the use of additional data in credit scoring, benefiting individuals with thin or no traditional credit files.
Voluntary Participation and Transparency: Prospective borrowers must elect to participate and must receive clear notice explaining how the pilot's credit scoring model differs from the FHA's current models.
Exclusion of Refinancing: The program cannot be used for mortgages whose proceeds are intended to prepay or pay off an existing loan secured by the same property.
Mandatory Reporting: The Secretary must submit detailed reports to Congress evaluating the pilot's effectiveness, including demographic data and its impact on the Mutual Mortgage Insurance Fund.
Expired
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