Summary: GAO discussed a variety of measures that the Farmers Home Administration's (FmHA) county offices could take to reduce housing costs and target more assistance to very low-income households and those occupying substandard housing.
GAO found that: (1) FmHA county offices generally did not adopt cost reduction measures suggested in FmHA guidelines; (2) as of October 1, 1985, FmHA had not issued regulations to extend the mortgage period from 33 to 38 years and to finance manufactured/mobile homes, which would have enhanced the targeting of very low-income households; (3) many of the FmHA county offices did not follow the guidance provided for increasing targeting to very low-income households and reducing costs because it was not mandatory; and (4) a variety of measures might be taken to help improve program targeting to very low-income households. The FmHA national office provided guidance proposing that county offices initiate outreach programs to locate more eligible very low-income households in need of adequate housing; however, GAO found that about half of the county offices did not initiate outreach programs. According to the 1980 census, more than 2 million rural households occupied substandard housing. The FmHA national office also provided guidance to its county offices on a number of suggested measures to reduce housing costs by 15 percent, which would help more very low-income households qualify for loans and reduce program costs, but few county offices followed the guidance. In 1984, most county offices were financing houses similar to those they financed in 1983, and housing costs had not been reduced.
