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B-215635 1 (1986-03-19)

handle is hein.gao/gaobadmfp0001 and id is 1 raw text is: 4V 6 THE COMPTROLLER GENERAL O CI1SION . OP THE UNITED STATES WASHINGTON. 0.C. 20548 FILE: B-215635 DATE: March 19, 1986 MATTER OF: Farmers Home Administration--Rural Housing Loans DIGEST: 1. When Pub. L. No. 98-181 was enacted in 1983, it removed specific statutory authority of the Farmers Home Administration (FmHA) to establish interest rates within prescribed limits for two types of rural housing loans, but left intact FmHA's author- ity to continue to make such loans. Neither the statutory language nor the legislative history indicates that Congress intended to terminate these loan programs or to authorize FmHA to make loans on an interest-free -basis. Accordingly, the Adminis- trator has the discretion to establish whatever interest rates he believes would be appropriate for these programs. 2. In 1983, the Congress deleted a statutory provi- sion which limited eligibility for loans under section 504 of the Housing Act of 1949 to individ- uals who could not qualify for loans under sections 502 or 503. However, FmHA regulations continue to reflect that limitation on eligibility. GAO recommends, pursuant to 31 U.S.C. S 720 that FmHA amend its regulations. This decision is in response to a request from the Administrator of the Farmers Home Administration (FmHA) for our opinion concerning the continued status of and interest rates to be charged under two loan programs administered by FmHA. The issue arose with the enactment of theiRural Housing Amendments of 1983, Pub. L. No. 98-181, 97 Stat. 1240, November 30, 1983. This legislation deleted provisions in FmHA's enabling legislation that expressly authorized the Secretary of Agriculture to set interest rates within pre- scribed limits for loans made under (1) the Rural Housing Loan and Grant Program, authorized by section 504 of the Housing Act of 1949, as amended (Housing Act) 42 U.S.C. § 1474, and (2) the Rural Housing Disaster loan program, authorized by section 521(a)(1)(G) of the Housing Act, 42 U.S.C. S 1490a(a)(1)(G). However, the statutory pro- visions authorizing FmHA to continue to make both types of loans remained in force.

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