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In response to a congressional request, GAO: (1) reviewed the Solanda Housing Guaranty project in Ecuador, focusing on Agency for International Development (AID) and Ecuadoran requirements for financing, design, and implementation; (2) investigated allegations that high indirect costs have unnecessarily increased the prices of Solanda units; and (3) analyzed AID-funded wood house demonstration projects in Peru and Ecuador to determine whether using alternative construction materials might improve the Housing Guaranty Program's delivery of low-income housing in Ecuador.

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Recommendations for Executive Action

Agency Affected Recommendation Status
United States Agency for International Development 1. If the Ecuador Housing Bank continues its policy of investing most of its resources in homes for those above the median income, the Administrator, AID, should work with the Bank to retarget its shelter programs to families earning below the median income and refine current Bank interest rate policy for social interest projects and projects for families earning above the median income so that low-income families do not subsidize higher income families. One approach could involve the Bank: (1) separating its investments in below-median income from investments in above-median income homes; and (2) charging different rates of interest for the two separate categories which would reflect the cost of the resources to the Bank.
Closed - Implemented
AID is working with BEV and JNV to retarget its shelter program to families earning below the median income level.

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