Summary: In response to a congressional request, GAO: (1) reviewed the Solanda Housing Guaranty project in Ecuador, focusing on Agency for International Development (AID) and Ecuadoran requirements for financing, design, and implementation; (2) investigated allegations that high indirect costs have unnecessarily increased the prices of Solanda units; and (3) analyzed AID-funded wood house demonstration projects in Peru and Ecuador to determine whether using alternative construction materials might improve the Housing Guaranty Program's delivery of low-income housing in Ecuador.
GAO found that: (1) the Solanda housing units' high construction standards and costs were not affordable for much of the original target population; (2) the use of wood or other building materials alone would not have significantly lowered the units' prices; (3) allegations that, due to AID requirements, indirect costs in Solanda had reached 50 percent were unfounded; (4) the Ecuador Housing Bank charged the lowest approved interest rate for Solanda mortgages, but it was still too high for the lower strata of the Housing Guaranty target group to qualify; and (5) U.S. wood was not a viable alternative under the Housing Guaranty Program but could be used for high-income housing.
