Agency for International Development's Housing Investment Guaranty Program
ID-78-44: Published: Sep 6, 1978. Publicly Released: Sep 6, 1978.
- Full Report:
Under the Agency for International Development's (AID's) Housing Investment Guaranty Program (HIG), U.S. private lenders provide long-term financing at commercial interest rates for housing projects undertaken by developing countries with AID assistance. The U.S. Government provides a "full faith and credit" guaranty of repayment of principal and interest. Since its inception in 1976, the HIG program has made more than $1 billion available to finance housing activities in 37 countries. AID has sought to introduce new, low-cost approaches to providing shelter and to finance the construction of housing affordable to groups at or below the median income of the recipient country.
Income levels of expected program beneficiaries generally range from the 15th to the 50th income percentiles. The very poorest income levels and those groups outside the income economy altogether can generally be reached only with direct humanitarian assistance. AID's accomplishments in the institution-building area have been primarily to help developing countries establish housing policies geared to serving low-income housing needs and local institutions capable of administering these policies. AID has not, however, been able to contribute to the development of housing finance systems to the point of assuring their ability to continue low-income housing efforts without the long-term, low-interest loans provided by AID. The HIG program has had a generally positive short-term impact on economic activity in recipient countries and a positive social impact in terms of satisfying the demand of low-income families for home ownership. Successful program management requires a separate field organization in addition to the centralized Washington staff.
Matter for Congressional Consideration
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Matter: The Administrator of AID should: continue to explore opportunities for the use of U.S. funds in poorer countries to stimulate self-sustaining shelter improvement programs; as an initial part of the development of a shelter program, require a detailed analysis of the country's housing finance system and use, where appropriate, U.S. development assistance funds as seed capital and for technical assistance; and as part of the housing guaranty loan negotiating process, work more closely with host government officials to determine economic and social needs and act where necessary to integrate housing guaranty loans through the use of U.S. development assistance available for these purposes. The Administrator should also: improve implementation of shelter programs and the integration of housing with other development efforts, help ensure the integrity of HIG by including a projection of estimated claim losses in the annual report to the Congress, and require that project reserve funds are fully and formally accounted for. (RRS)