Rural Housing: Shift to Guaranteed Program Can Benefit Borrowers and Reduce Government's Exposure
RCED/AIMD-95-63
Published: Dec 21, 1994. Publicly Released: Jan 09, 1995.
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Highlights
Pursuant to a congressional request, GAO reviewed the: (1) Farmers Home Administration's (FmHA) single-family housing loan program, focusing on the merits of allowing borrowers to refinance their direct and guaranteed loans at lower interest rates.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress should consider amending the Housing Act of 1949 to allow FmHA direct loan borrowers to refinance their loans using the guaranteed program. Additional budget authority may be required to issue these loan guarantees. |
Closed – Implemented
|
In a June 7, 2000, report to Congressman Andrews (RCED-00-214R), GAO updated the data in its December 1994 report. Mr. Andrews used the report as a basis for trying to include language in the fiscal year 2001 Agriculture Appropriations legislation to include a mechanism for section 502 borrowers to graduate to private credit using the 502 guaranteed program along with a similar proposal allowing borrowers currently in the 502 guaranteed program to refinance within the program. The appropriations attempt did not go through, but Mr. Andrew succeeded in getting the language in H.R. 3834 -- The Homeowners Financing Protection Act. The legislation was signed into law on December 27, 2000, as part of the American Homeownership and Economic Opportunity Act of 2000 (P.L. 106-569). |
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Topics
Cost controlCreditGovernment guaranteed loansHomeowners loansLoan interest ratesLoan repaymentsMortgage loansRural housing programsSubsidiesInterest rates