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Department of Education, Department of Commerce, EPA, etc. 



9. Expand the size and effectiveness of the Fanners Home Intermediary Relending Program. 

 Intermediaries have knowledge of the community, lower overheads, and streamlined 

 financing procedures. They achieve greater "bang for the buck" with federal dollars. 

 Increase funding levels, select intermediaries on a competitive basis, and base follow-up 

 support on performance. Consider converting all or part of loans to grants as 

 intermediaries meet and exceed high performance standards. Remove loan-by-loan 

 approval requirements for intermediaries with a proven track record. 



1 0. Increase the effectiveness of the Rural Business Enterprise Grant program by eliminating 

 the set-asides for "Congressionally-Designated Projects." Promote multi-county revolving 

 loan funds and multi-jurisdictional lending consortia as a means of serving smaller 

 businesses in rural areas. Many small communities and counties do not have adequate 

 staff capacity nor large enough loan demand to justify creation of a loan fund for their own 

 area. 



1 1 . Make the Farmers Home B&l guarantee program work better for rural and small firms by 

 streamlining loan approval, disbursement, procedures, and documentation. Create more 

 effective incentives for lenders to make smaller guaranteed loans by extending approval 

 authority for loans under $50,000 to all B&l lenders who meet and sustain certain 

 minimum loan volume and portfolio performance standards. The requirement that 

 borrowers have audited financial statements also makes the program unworkable for most 

 small businesses. Open up the B&l program to qualified non-bank lenders. Encourage 

 the creation of statewide providers and packagers of guaranteed loans where needed to 

 serve underserved rural areas. 



12. Include $500M in the proposed Economic Stimulus Package for the backlog of Farmers 

 Home home-ownership and rental housing programs. The backlog of approved FmHA 

 Section 515 Rental Loans stands at more than $1 billion. Set-aside money for nonprofits 

 should be continued and expanded. 



13. Expand and refine the 502 Home Mortgage Guarantee Program so more lenders use it. 

 County level sign-off and proposed auditing requirements are problems. To make it 

 easier to guarantee purchase of existing homes, FmHA could fund county offices to 

 obtain inspections and subsidize part of the upfit. The subsidy component is far too small 

 to meet the need; to optimize allocation, allot subsidies to nonprofit housing organizations 

 for distribution. 



1 4. Continue FmHA's Title V Direct Loans to meet the needs of very low-income households. 

 Although this program serves poor households, the 90-day delinquency rate is only 2.4%. 

 The Deferred Mortgage Program, which helps households below 50% of median income, 

 needs to be expanded. 



1 5. Fully fund the $500M backlog of approved RDA/FmHA rural water-sewer projects as part 

 of the administration's economic stimulus package. 



