U S Government Accountability Office

Home mortgage guarantees, issues to consider in evaluating opportunities to consolidate two overlapping single-family programs U S Government Accountability Office

Home mortgage guarantees, issues to consider in evaluating opportunities to consolidate two overlapping single-family programs: report to the Chairman, Subcommittee on Housing and Insurance, Committee on Financial Services, House of Representatives. RHS and FHA help borrowers finance homes by guaranteeing single-family mortgage loans made by private lenders, and both operate in rural areas. However, eligibility for RHS guarantees is restricted to RHS-eligible areas and to low- and moderate-income households. A prior GAO report (GAO-12-554) found overlap in the products offered, borrower income levels, and geographic areas served by the two guarantee programs and recommended that RHS and FHA evaluate and report on opportunities for consolidating similar housing programs. GAO was asked to expand on the analysis in its 2012 report. This report compares the characteristics, performance, and borrower costs of RHS- and FHA-guaranteed loans in RHS-eligible areas. GAO analyzed RHS and FHA data for home purchase loans guaranteed in fiscal years 2010-2014 (which allowed for analysis of loan performance over multiple years). GAO also interviewed RHS and FHA officials, eight lenders (selected to capture variation in rural areas served, origination volume, and mix of RHS and FHA business), and industry associations.