“GAO
recommends
that
FHFA
provide
written
direction
to
the
enterprises
clarifying
how
they
are
to
comply
with
fair
lending
requirements
and
how
FHFA
will
supervise
their
compliance,”
the
report
states. 

According
to
the
document,

FHFA
neither
agreed
nor
disagreed
with
the
recommendation.
The
agency
did
not
immediately
respond
to

HousingWire’s
request
for
comment.

The
report
responds
to
a
request
from
Rep.

Maxine
Waters
(D-Calif.)
and
Sen.

Elizabeth
Warren
(D-Mass.)
to
investigate
the
effects
that
AI
and
property
technology
may
have
on
fair
and
affordable
housing.

The
document
is
based
on
a
literature
review,
industry
and
government
reports,
and
interviews
with
officials
and
industry
experts,
and
it
was
examined
through
the
lens
of
relevant
federal
laws.

Fair
lending
risks

The
GAO
concluded
that
fair
lending
laws
can
be
violated
when
chatbots
or
advertising
algorithms
steer
consumers
in
protected
classes
toward
certain
listings,
or
when

AVMs
rely
on
historic
home-price
data
that
may
perpetuate
the
effects
of
past

discrimination. 

The
same
can
happen
with

underwriting
tools,
it
added.
Based
on
studies
and
industry
group
interviews,
the
GAO
said
that
although
AI
is
not
widely
used
to
make
credit
decisions
on
mortgages,
its
use
may
still
perpetuate
bias.

“Data
used
to
train
AI-powered
algorithmic
models
may
reflect
past
underwriting
decisions
and
lending
practices
influenced
by
discriminatory
practices
such
as
redlining,”
the
report
stated. 

The
GAO
said
it
identified
fewer
potential
risks
associated
with
e-closing
tools
than
with
other
product
types,
with
no
relevant
studies
found
in
its
literature
search.
But
according
to
officials
at
the

Federal
Trade
Commission
(FTC)
and

Consumer
Financial
Protection
Bureau
(CFPB),
these
tools
can
pose
risks
related
to
wire
fraud.

The
report
also
said
that
while
the
FHFA
has
conducted
examinations
specifically
focused
on
products
such
as
underwriting
and
valuation
systems,
other
agencies
—
including
the
CFPB,
FTC
and
the

U.S.
Department
of
Housing
and
Urban
Development
—
have
not
taken
a
product-focused
approach.

In
addition,
FHFA
implemented
new
priorities
in
2025
and

changed
policies
and
programs,
including
those
related
to
fair
lending
oversight.
It
changed
its
examination
approach,
waived
components
of
its
fair
lending
rule
and
rescinded
related
guidance,
the
GAO
said.

“Given
the
extent
of
FHFA’s
changes,
providing
additional
written
direction
for
the
enterprises
on
the
changes
would
help
ensure
the
enterprises
clearly
understand
FHFA’s
compliance
requirements
and
its
supervisory
expectation,”
the
report
concluded. 

Christopher
Bosland,
deputy
director
of
the
FHFA’s
division
of
enterprise
regulation,
noted
in
a
letter
attached
to
the
report
that
the
regulator
reminded
Fannie
and
Freddie
this
year
of
their
responsibilities
to
comply
with
all
statutory
requirements,
including
fair
lending
rules.
Bosland
referenced
a
2019
advisory
bulletin
outlining
expectations
for
compliance
risk
management.