USDA OIG: Rural Development Single Family Housing Direct Loan Program Credit Reporting
The U.S. Department of Agriculture’s (USDA) Rural Development agency’s mission is to help improve the economy and quality of life in rural America. Rural Development’s Single Family Housing Direct Loan Program supports rural residents who seek mortgage credit by making and servicing direct loans to very-low and low-income borrowers. In fiscal year 2015, the total outstanding principal balance of the agency’s direct loan portfolio was approximately $16 billion.
USDA OIG found that, although Rural Development timely reported Single Family Housing Direct Loan Program repayment information to the credit bureaus, approximately 30,000 borrower accounts, with a total outstanding balance of over $1 billion, were either transmitted inaccurately or improperly excluded from reporting.
In addition, OIG found 153 borrower accounts, with a current balance of $8.8 million, where the dates of birth indicated the primary borrowers as under 18 years of age. Two borrowers were listed as having birthdates in the year 2085. Report.
GAO: Rural Housing Service: Actions Needed to Strengthen Management of the Single Family Mortgage Guarantee Program
The estimated credit subsidy costs (expected net lifetime costs) of single-family mortgages guaranteed by the Department of Agriculture’s (USDA) Rural Housing Service (RHS) substantially increased in recent years, partly due to high losses from the 2007 through 2011 housing crisis. For example, the fiscal year 2013 and 2014 reestimates (which federal agencies must do annually) indicated higher expected costs of $804 million and $615 million, respectively, compared with the prior reestimates.
From 2007 through 2014, the amount of outstanding RHS guarantees grew from less than $20 billion to more than $100 billion. At the same time, the estimated long-term costs of the guarantee program—known as credit subsidy costs—have risen. Report.
GAO: Telecommunications: USDA Should Evaluate the Performance of the Rural Broadband Loan Program
The U.S. Department of Agriculture (USDA) Rural Utilities Service (RUS) has approved 100 loans to geographically and demographically diverse areas through its Rural Broadband Access Loan and Loan Guarantee Program, though over 40 percent of these loans are no longer active.
About $2 billion in loans have been made to providers in areas with diverse demographics and economies, including areas with low population densities and income as well as areas in relative proximity to large cities with robust local economies. Of the 100 RUS loans approved through the loan program, 48 are currently being repaid, and 9 have been fully paid back. Forty- three are no longer active, either because they were cancelled before they were paid out (25 rescinded) or because the provider defaulted by failing to abide by the terms of the loan (18 defaulted). Report.
U.S. News: Failure to Connect
USDA OIG: Loss Claims Related to Single Family Housing Guaranteed Loans
Rural Development officials improperly reimbursed lenders for losses on over 75 percent of the claims in our statistical random sample.
As a result, Rural Development overpaid lenders more than $87,00077 on 77 of the 102 claims we reviewed. We project that, across the program, Rural Development overpaid $6.28 million, related to 6,60779 claims submitted by lenders for loss reimbursement. Report.
USDA OIG: Controls Over Eligibility Determinations for Single Family Housing Guaranteed Loan Recovery Act Funds (Phase 2)
This report presents the results of our second phase of audit work related to the eligibility of borrowers who obtained single family housing loan guarantees from funds authorized by the American Recovery and Reinvestment Act of 2009.
OIG estimates that 30,310 loans (almost 37 percent of the portfolio) were ineligible with a projected total value of $4.16 billion. OIG's analysis of the sample identified 33 loans where lenders had not fully complied with Federal regulations or Recovery Act directives in determining borrower eligibility. Report.
USDA OIG: Rural Utilities Service Needs to Improve Project Transparency for the Water and Waste Disposal System Recovery Act Projects
The Rural Utilities Service (RUS) is a Rural Development agency within the Department of Agriculture (USDA) that administers the Water and Waste Disposal System Program and provides loans and grants for sewer, storm water, and solid waste disposal systems in cities and towns having populations up to 10,000 people.
As part of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Congress provided USDA with $28 billion in funding. Approximately2 $3.8 billion of those funds were designated for RUS’ Water and Waste Disposal System Program.
Based on OIG's review, project construction usually did not immediately follow the obligation of funds for the projects in our sample. OIG also determined that, prior to the construction phase, project spending may be minimal and few jobs created. OIG found that 13 of the projects reported expenditures totaling $28.6 million as of March 31, 2011. RUS estimated that 3,384 jobs would be created or saved from OIG's sample of 22 water and waste disposal projects. However, as of March 31, 2011, a total of only 178 actual jobs had been reported on Recovery.gov as created or saved. Report.
USDA OIG: Single-Family Housing Direct Loans Recovery Act Controls – Compliance Review of Borrowers’ Eligibility Determinations
The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided the Department of Agriculture (USDA) with $28 billion in funding. Of this amount, $1 billion was allotted to fund Single-Family Housing (SFH) Direct Loans to borrowers.
OIG reviewed loan file documents to determine if field personnel followed policies and procedures and made proper eligibility determinations regarding borrowers and the homes they purchased.
OIG found these approved borrowers (1) had no history of stable and dependable income, (2) had a credit history that did not indicate the ability and willingness to repay a loan, and (3) did not meet repayment ability guidelines. Based on OIG's overall sample results, OIG estimates that
1,450 loans (18 percent), with a projected total value of $173 million, may have similar issues that would have resulted in ineligible borrowers or those with higher risk of default receiving loans. Report.