Rural Housing: Fmha's Home Loan Program Not Meeting the Needs of All Rural Residents: Rced-93-57
Description
Pursuant to a congressional request, GAO reviewed the Farmers Home Administration's (FmHA) rural single-family housing program, focusing on whether program funds are disproportionately concentrated in or around metropolitan statistical areas (MSA).
GAO found that: (1) FmHA rural single-family home program funds were disproportionately concentrated in and around MSA and higher than needed or warranted for housing in these areas; (2) remote rural housing areas receive a disproportionately low amount of program funds in relation to their needs; (3) although Congress has undertaken several initiatives to address the fund allocation disparity, including authorizing programs that increase housing construction cost assistance and promote the availability of program funds, the initiatives have not been implemented or funded; (4) factors contributing to the disparity in program funds apportionment and demand between remote rural areas and those near MSA include low program income limits for remote rural areas, subjective application of housing criteria used to qualify homes for program participation, and restrictive FmHA home construction financial assistance policies; (5) FmHA officials believe low income limits and subjective application of housing approval criteria have the most impact on the concentration of funds allocation; (6) remote rural housing areas' low demand for funds often results in the reallocation of unused funds to other rural housing areas including those near MSA; and (7) between 1987 and 1991, FmHA reallocated about $1.1 billion in rural program funds under its need-based formula.
GAO found that: (1) FmHA rural single-family home program funds were disproportionately concentrated in and around MSA and higher than needed or warranted for housing in these areas; (2) remote rural housing areas receive a disproportionately low amount of program funds in relation to their needs; (3) although Congress has undertaken several initiatives to address the fund allocation disparity, including authorizing programs that increase housing construction cost assistance and promote the availability of program funds, the initiatives have not been implemented or funded; (4) factors contributing to the disparity in program funds apportionment and demand between remote rural areas and those near MSA include low program income limits for remote rural areas, subjective application of housing criteria used to qualify homes for program participation, and restrictive FmHA home construction financial assistance policies; (5) FmHA officials believe low income limits and subjective application of housing approval criteria have the most impact on the concentration of funds allocation; (6) remote rural housing areas' low demand for funds often results in the reallocation of unused funds to other rural housing areas including those near MSA; and (7) between 1987 and 1991, FmHA reallocated about $1.1 billion in rural program funds under its need-based formula.
