Foreign Housing Guaranty Program: Goals Are Not Achieved and Financial Condition Is Poor

GAO discussed the Agency for International Development's (AID) Housing Guaranty Program. GAO noted that: (1) over the past 34 years, the Housing Guaranty Program has evolved from financing home construction in Latin America to financing a variety of shelter-related activities throughout the world; (2) federal assistance has gone to advanced and creditworthy developing countries that have ready access to international funding; (3) the program has not had the intended impact of stimulating local private sector investment in low-income shelter and AID is not sure whether the program is benefitting the poor target population; (4) many borrowers have defaulted on loan payments, and will likely default on these payments in the future; (5) the total cost to the government for the program is about $1 billion, since AID does not generate enough income from the fees it charges borrowers to cover the loan defaults; and (6) AID has spent several hundred million dollars to provide technical assistance to borrowers to help implement shelter-related projects.