Rural Housing: Impact of Refinancing and Selling FmHA Section 502 Homeownership Loans
RCED-87-54
Published: Mar 31, 1987. Publicly Released: Mar 31, 1987.
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Highlights
GAO reported on the Department of Agriculture (USDA) Farmers Home Administration's (FmHA) plan to sell rural homeownership loans, and compared the impact on revenues of selling or refinancing the loans.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| In order to maximize revenues, Congress may wish to consider amending the Omnibus Budget Reconciliation Act of 1986 to: (1) specify that revenue proceeds from refinancing section 502 loans be counted toward reducing federal outlays as required by the law; and (2) instruct the Secretary of Agriculture to give priority to refinancing these loans in meeting the targeted outlay reduction. |
Closed – Not Implemented
|
Congress did not amend the 1986 act and, on September 29, 1987, FmHA sold section 502 mortgage loans with a face value of about $2.9 billion to a private sector trust in order to achieve the $1.7 billion targeted outlay reduction mandated by the act. |
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Topics
Agricultural programsFarm creditFinancial managementLoan accounting systemsMortgage loansMortgage programsRural housing programsMortgage creditHomeownershipHousing