Farmers Home Administration

Federally Acquired Farm Property Presents a Management Challenge Gao ID: RCED-86-88 June 13, 1986

In response to a congressional request, GAO examined the increase in the number of farms that the Farmers Home Administration (FmHA) acquired as a result of loan foreclosures and other actions, specifically: (1) why the increase occurred; (2) the financial impact on the government; and (3) how well FmHA is managing the properties.

GAO found that: (1) the increase in the number of farms that failed is due to poor farming and financial practices or personal problems, but future failures may be related to economic factors; (2) FmHA lost revenues from acquiring the inventory properties due to undersecured loans and bad loan-servicing policies; and (3) FmHA allotted only a minimal amount of funds to manage the inventory properties in 1985, but will increase its management expenditures to maintain property values and result in higher sales income in the future.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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