Farmers Home Administration: Appeals of Farm and Housing Loan Decisions

GAO discussed the appeals process for individuals dissatisfied with Farmers Home Administration's (FmHA) farm, emergency, and rural housing loan decisions. GAO noted that: (1) 64 percent of 918 farmer loan program appeals had been heard by hearing officers, 21 percent were concluded or withdrawn without a hearing, and 15 percent had hearings pending; (2) 58 percent of 451 rural housing loan program appeals had been heard by hearing officers, 34 percent were concluded or withdrawn, and 8 percent were still pending; (3) individuals appealed 45 farmer program loan decisions because of dissatisfaction or disagreement with FmHA appraisals of loan security property, consideration of financial information, denial of loan servicing, or decision that they lacked farming experience; (4) individuals appealed 25 rural housing program appeals decisions to prevent loan foreclosures, seek a reduction in loan payments, or contest FmHA decisions to deny loans; (5) 80 percent of appeals resulting in hearings exceeded the 45-day standard, and farmer program appeals averaged 4 months for a hearing and rural housing loan appeals averaged 2.5 months; and (6) hearing officers issued decisions on about 52 percent of the 350 appeals filed by minorities, compared with 58 percent of the 1,019 nonminority appeals filed. GAO believes that the Department of Agriculture's Office of Inspector General's report regarding the quality of decisions did not clearly identify study limitations or show that there was no statistical assurance that the findings applied to any cases other than those reviewed.