Phil Bell: A $100 Cost That Could Lock Millions Out Of Homeownership

“The Black homeownership rate stood at about 45.9% in 2023, compared with roughly 73.8% for non-Hispanic White Americans. This gap underscores how mortgage underwriting and the policies that govern access to credit continue to shape economic opportunity in ways that matter deeply to families and communities.”

In a commentary published at The Mortgage Note, Project 21 Ambassador Phil Bell makes a compelling argument for preserving the “tri-merge” credit requirement that requires lenders to review credit reports from all three major bureaus to determine a buyer’s creditworthiness:

In a moment when policymakers are rightly focused on lowering rates and expanding opportunity, eliminating tri-merge credit reporting would move the country backward, locking millions out of homeownership to save $100 on a transaction worth hundreds of thousands.

Read Phil’s commentary in full below.

For most Americans, buying a home isn’t about spreadsheets or policy debates. It’s about stability. It’s about a place to raise kids, build equity, and finally feel like you’ve made it.

Phil Bell

But homeownership remains far from equally accessible across racial groups. According to the U.S. Census Bureau, the Black homeownership rate stood at about 45.9% in 2023, compared with roughly 73.8% for non-Hispanic White Americans. This gap underscores how mortgage underwriting and the policies that govern access to credit continue to shape economic opportunity in ways that matter deeply to families and communities.

Like the concrete foundation beneath a home, mortgages allow families to stretch their purchasing power far beyond annual income and invest in long-term stability. For decades, this system has relied on standardization, anchored by Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises that buy mortgages from lenders, bundle them into securities, and sell them to investors.

That process does more than fuel Wall Street. It frees up capital so lenders can reinvest in new mortgages, auto loans, small businesses, and local development. The results are visible in nearly every community: homes being built, cars being purchased, shopping centers and office parks rising; each layer supported by a healthy, functioning mortgage market.

One often-overlooked pillar of that system is the “tri-merge” credit requirement. This requires lenders to review credit reports from all three major bureaus to determine a buyer’s creditworthiness if they intend to have a GSE purchase the mortgage they have underwritten. This approach provides a fuller, more accurate picture of a borrower’s financial history, protecting both lenders and investors while expanding access to credit.

That last point matters more than many realize.

Each credit bureau compiles data differently. A borrower who looks marginal under one report may appear qualified under another. Reviewing all three doesn’t just reduce risk; it prevents unnecessary exclusion. That distinction matters even more in Black communities, where credit files are more likely to be thinner, newer, or shaped by nontraditional financial paths — meaning partial data can misclassify responsible borrowers as higher risk than they actually are.

In effect, this comprehensive approach helps extend homeownership opportunities to borrowers who might otherwise be shut out. Consider the data: Black Americans, on average, have credit scores roughly 100 points lower than white borrowers and 82 points below the national median. When TransUnion modeled what would happen under a bi-merge system, pulling only two credit reports, the results were stark. An estimated 1.9 million Americans would lose mortgage eligibility.

A shift to a single-report system would be even more restrictive.

The consequences wouldn’t fall evenly. Fewer qualified borrowers would mean fewer Black families, fewer working-class families, and fewer first-time buyers gaining access to homeownership. The impact wouldn’t stop there. Reduced lending would slow housing starts, curb home equity lending, and ripple through construction, auto sales, appliance purchases, retail, and local services. All of this, because of a cost some critics estimate at around $100 per loan, which represents a rounding error on the closing costs for an average January 2026 mortgage of $408,700.

Yet despite the overwhelming benefits of tri-merge credit reporting, the Biden administration moved to eliminate the requirement at the end of his term. Fortunately, that effort was halted in July 2025 when Bill Pulte, appointed by President Trump to lead the Federal Housing Finance Agency, ended the Biden-era attempt to dismantle the tri-merge policy. But now some mortgage industry voices are again pushing for bi-merge or even single-report alternatives in the name of cost savings.

That decision deserves recognition and permanence.

Fannie Mae and Freddie Mac exist to standardize mortgage lending, expand access to credit, and ensure liquidity in the housing market. The tri-merge system supports those goals by making risk clearer, not murkier. It helps lenders extend credit responsibly, investors price risk accurately, and families access the single most important wealth-building tool in America. Weakening this system doesn’t make housing more affordable – something President Trump has made a cornerstone of his second term in office – it makes it less so.

In fact, in early January, President Trump announced a plan to purchase $200 billion in mortgage bonds to help lower mortgage rates and reduce two of the biggest barriers to homeownership: access to credit and the cost of monthly payments. If successful, the result could be a renewed housing boom with ripple effects across the broader economy. But for that boom to materialize, policymakers must resist the temptation to tamper with a system that already works.

In a moment when policymakers are rightly focused on lowering rates and expanding opportunity, eliminating tri-merge credit reporting would move the country backward, locking millions out of homeownership to save $100 on a transaction worth hundreds of thousands.

We don’t need to reinvent the mortgage market to strengthen it. We need to protect what already works. Because for families trying to buy their first home or Black Americans who have historically had difficulty accessing credit, this isn’t an abstract policy debate. It’s the difference between a key in the door and a door that never opens.

Phil Bell is an Ambassador with the Project 21 Black Leadership Network as well as the Founder and Chief Executive Officer of the Tower K Group, a firm that helps organizations reach their policy, strategy, and fundraising goals. This was originally published at The Mortgage Note.