Farmers Home Administration

As of September 1993, the Farmers Home Administration's (FmHA) outstanding direct and guaranteed loans to American farmers totaled nearly $19 billion; about 29 percent of this, or $5.4 billion, was held by delinquent borrowers who were behind on their loan payments. During fiscal years 1991-93, FmHA lost $5 billion by reducing the delinquent debt of direct loan borrowers and paid losses on guaranteed loans of about $160 million. During this same period, FmHA made about $55 million in new direct loans to 936 borrowers after it had reduced or forgiven about $133 on their previous loans. As of September 1993, about 21 percent of these borrowers were delinquent on their new loans. FmHA also made about $60 million in new guaranteed loans to 408 borrowers during fiscal years 1991-93 after it had lost $67 million on their previous guaranteed and direct loans. As of September 1993, about four percent of these borrowers were delinquent on their new guaranteed loans. FmHA loaned another $90 million during fiscal years 1991-93 under a policy that allows delinquent borrowers to obtain new direct loans for operating expenses.

GAO found that: (1) of the $18.8 billion in outstanding FmHA direct and guaranteed loans to U.S. farmers in 1993, $5.4 billion was held by delinquent borrowers; (2) between 1991 and 1993, FmHA lost a total of $5 billion due to reductions in the delinquent debt of direct loan borrowers and paid a total of $160 million in losses on guaranteed loans; (3) between 1991 and 1993, FmHA made new loans totalling $55 million to 936 borrowers that had their delinquent loans reduced or forgiven and $60 million in new guaranteed loans to 408 borrowers after it incurred losses on their previous guaranteed and direct loans; (4) as of September 1993, nearly 21 percent of the previously delinquent borrowers were delinquent on their new direct loans and about 4 percent of the borrowers that received new guaranteed loans were delinquent on their loans; and (5) FmHA made additional loans totalling $90 million during fiscal years 1991 to 1993 under a policy that allows delinquent borrowers to obtain new direct loans for operating expenses.