Federal Agricultural Mortgage Corporation: Potential Role in the Delivery of Credit for Rural Housing
RCED-91-180
Published: Aug 07, 1991. Publicly Released: Aug 07, 1991.
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Highlights
Pursuant to a congressional request, GAO provided information on the: (1) Federal Agricultural Mortgage Corporation's (Farmer Mac) actions to establish a secondary market for rural housing loans, including the development of standards to govern the quality of those loans; (2) Farmer Mac's potential role in facilitating the delivery of credit for rural housing; and (3) barriers Farmer Mac may face in facilitating the delivery of credit for rural housing.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| In view of Farmer Mac's continuing position that it will accept loans for properties that exceed the $100,000 limit, Congress, through its oversight process, may wish to take measures to ensure that Farmer Mac will adhere to the limit. Alternatively, Congress may wish to consider authorizing a higher limit and direct Farmer Mac to establish region-specific loan caps within this higher limit to accommodate varying housing costs nationwide and to ensure that only moderately priced properties are included in Farmer Mac I pools. |
Closed – Implemented
|
Farmer Mac has changed its position. It will no longer accept loans that exceed $100,000 without further clarification of its authority to do so. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Federal Agricultural Mortgage Corporation (Farmer Mac) | The President and Chief Executive Officer of Farmer Mac should accept only eligible loans for properties that have a purchase price of no more than $100,000 (adjusted for inflation) to be consistent with its authorizing legislation. If Farmer Mac believes that the $100,000 limit on the purchase price of rural housing prevents eligible borrowers in certain high-cost areas from participating in Farmer Mac I, it should prepare a justification for increasing the limit and seek authorization from Congress to do so. |
Closed – Implemented
Farmer Mac stated that loans for rural housing in excess of the $100,000 limitation, as interpreted by GAO, will not be accepted as qualified for pooling by Farmer Mac without clarification of the matter by Congress, an appropriate federal agency, or in the courts.
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Topics
Agricultural programsBudget authorityCreditFederal corporationsGovernment guaranteed loansLending institutionsMortgage loansMortgage programsProperty improvement loansRural housing programs