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089407 1 (1972-03-16)

handle is hein.gao/gaobacvju0001 and id is 1 raw text is: list c Cc.owsin . CIVIL DIVISION UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 I1 111 11L M0lllll 94lll 07llll1111111111111111111 LM089407 MAR I v 1972 Dear Mr. Smith: The General Accounting Office has completed a survey of the farm ownership and operating loan programs of the Farmers Home Administra. tion (YEA). Our survey was performed at FMA's headquarters office in ashington, D.C., FiA State offices in Illinois and North Carolina, two county offices in each State, and the FHA Finance Office in St. Louis, Missouri. On the basis of our survey, during which we reviewed 18 farm ownership loans totaling $487,730 and 38 operating loans totaling $295,730, we concluded that the programs were appropriately administered at the locations visited regarding (1) the borrower's ability to obtain credit elsewhere, (2) the adequacy of loan security, (3) the borrower's compliance with loan closing conditions, (4) the borrower's graduation to other sources of credit, and (3) the refinancing of existing debts. During the course of our survey, FRA revised its concerning advances of funds under the operating loan interest on all initial advances will accrue from the issory note rather than from the date of the check as viously. This revision will reduce interest costs to borrowers. Instructions program so that date of the prom. required pre operatiag loan Also we discussed with FRA headquarters officials the possibility of greater use of multiple advances under the programs. The use of multiple advances would provide increased assurance that cash advances of Goverament funds to the borrowers are limited to the minismn amounts needed and are timed to be in accord with the borrovers' actual eash requirements. The officials agreed to study this matter further. In view of the actions already taken or planned by your agency, we do not plan to review the farm ownership and operating loan programs further or to make any recomendation at this time. We would, however, appreciate being advised of the results of the study regarding the use of multiple advances. Copies of this letter are being sent to the Office of the Inspector General. q-gF36qO?- ie I

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