The Financial Condition of the Farmers Home Administration's Loan Portfolio and Its Borrowers

GAO discussed farmers' growing reliance on Farmers Home Administration (FmHA) resources, focusing on: (1) the FmHA portion of the total farm debt; (2) the total number of loans and borrowers; (3) the loan amounts for each FmHA farmer program; and (4) delinquencies and loan losses occurring in farmer programs. GAO found that: (1) the FmHA outstanding farm loan portfolio increased from $6 billion in 1978 to almost $28 billion in 1985; (2) FmHA has made new loans to insolvent borrowers; (3) about half of the FmHA farm loan portfolio is in jeopardy of default; (4) $4 billion of the 1985 loan delinquencies were concentrated in the emergency disaster program; (5) total annual farm loan losses increased 400 percent between 1982 and 1985; and (6) the average borrower has a debt-to-asset ratio of 83 percent with a net cash shortfall of $56,000. GAO also found that FmHA helped to bring about 45,000 borrowers current during fiscal year 1985 through rescheduling, reamortization, and debt waivers.