[Question Concerning Interest Rates Under FmHA Loan Programs]

The Farmers Home Administration (FmHA) requested a decision concerning the continued status of and interest rates to be charged under its two rural housing loan programs. GAO held that, in 1983, Congress enacted legislation that: (1) removed FmHA statutory authority to establish interest rates; (2) continued FmHA authority to make loans; (3) was not intended to terminate the programs or to authorize FmHA to give interest-free loans; and (4) limited eligibility for loans to individuals. GAO found that FmHA: (1) should amend its regulations to reflect the eligibility limitations; and (2) has the authority to establish appropriate interest rates for the loan programs.