Identification code 05-60-4220-0-3-352 Under proposed legislation, 1966.-Proposed legislation would amend title V of the Housing Act of 1949 to provide for a program of insured rural housing loans. The insured loan program would be supported by the special assistance and secondary market facilities of the Federal National Mortgage Association. A $350 million level of insured housing loans is anticipated if the insured loan program becomes operative early in 1966. Families in the lower income levels would require an estimated $300 million annually, and an estimated $50 million annually would be needed for other applicants. In addition to the $200 million in loans made from the proposed new fund for later sale, it is expected that approximately $150 million in loans from private sources will be insured annually. The Rural housing insurance fund would be used for the farm labor housing and rental housing for the elderly loans presently insured through the Agricultural credit insurance fund. Authority to insure rental housing for the elderly loans through the Agricultural credit insurance fund will expire on September 30, 1965, but extension of this program is being proposed. All of these loans would be made and serviced by the Farmers Home Administration. DIRECT LOAN ACCOUNT Direct loans and advances under subtitles A and B, and advances under section 335(a) for which funds are not otherwise available, of the Consolidated Farmers Home Administration Act of 1961 (7 U.S.C. 1921), as amended, may be made from funds available in the Farmers Home Administration direct loan account as follows: real estate loans, [$60,000,000] $40,000,000; and operating loans, $300,000,000, of which $50,000,000 shall be placed in reserve to be used only to the extent required during current fiscal year under the then existing conditions for the expeditious and orderly conduct of the loan program. (Department of Agriculture and Related Agencies Appropriation Act, 1965.) Program and Financing (in thousands of dollars) 14 -261,965 -292,717-301,690 -102 -211 -44,834 -22 -215 -200 -50,444 -12 Direct loan account.-This account was established on October 16, 1961, pursuant to section 338 (c) of the Consolidated Farmers Home Administration Act of 1961. Real estate and operating loans are made under the authorities of subtitle A and B of the act to farmers and ranchers and to associations unable to obtain credit from other sources at reasonable rates. Loans made under these and similar prior authorities are reported and accounted for in this account. In 1965, the total available for loans, including a $50 million reserve for operating loans, is $360 million. In 1966, it is proposed to carry out the estimated loan program of $340 million through utilization of receipts to the Direct loan account representing collections on loans outstanding. No new borrowing authorization is estimated for 1966. In addition to the direct loans, farm ownership and soil and water loans advanced by private lenders will be insured within the annual statutory insurance authority of $200 million for these purposes. Legislation is being proposed to increase this insured loan authority to $300 million. Contingent liabilities for these insured loans are reflected in the Agricultural credit insurance fund schedules. Real estate loans-a. Farm ownership loans.-Direct and insured loans are made to farmers and ranchers for acquiring, enlarging, or improving farms, including farm buildings; for financing land and water development, use and conservation including recreational uses and facilities; for forestry development; for refinancing existing indebtedness; and for loan closing costs. Loans are confined to farms which are not larger than family farms. A loan cannot exceed $60 thousand in any case. In addition, the indebtedness against a farm or other security, including the amount of the loan, cannot exceed $60 thousand or the normal value of the farm and any additional security. b. Soil and water loans.-Direct and insured loans are made to farmers and ranchers and to associations for the effective development and utilization of water supplies and for the improvement of farmland by soil and water conserving facilities and practices. Loans to associations also are made for shifts in land use including the development of recreational facilities. There is no limitation on the size of farms that may be improved with loans to individual farmers. For loans to individuals, a loan cannot exceed $60 thousand in any case; in addition the indebtedness against a farm or other security, including the amount of the loan, cannot exceed $60 thousand or the normal value of the farm and any additional security. For loans to associations, the unpaid principal indebtedness is limited to $500 thousand in the case of a direct loan and $1 million in the case of an insured loan. 511 3.349 1966 estimate Number Amount 5,000 800 $2,000 650 4,000 650 4,000 41,000 5,000 newed for not more than 5 additional years. Loans are secured by crop and chattel liens and, when necessary, by real estate mortgages. FARM OPERATING LOANS 1965 estimate 1966 estimate 76,611 Revenue, Expense, and Retained Earnings (in thousands of dollars) Operating program: Net operating income.. Nonoperating income or loss: Proceeds from sale of acquired property: Loans receivable.. Total proceeds from sale.. Net nonoperating loss. Net income for the year.. Assets: Treasury balance..... Accounts receivable, net. Property acquired through fore- Land and improvements.. Total assets.. To individuals.. To associations.. Current.. Farm ownership and soil and water loans are repayable Operating loans.-Direct loans are made to farmers and 1964 1965 1966 actual estimate estimate 8 44,856 47,495 50,456 27,055 28,408 30,929 17,801 19,087 19,527 100 433 200,988 144,859 26,436 533 450 500 -543 -460 -510 -10 -10 -10 17,791 19,077 19,517 25,648 43,439 62,516 43,439 62,516 82,033 205,591 150 300 14 1965 estimate 339 229 399 399 86 86 581 1,079,694 1,097,491 1,116,568 1,136,085 200 300 88888 97,223 79,506 36,102 39,014 982,250 1,016,669 1966 estimate 14 Government equity: year... 597,959 597,959 597,959 End of year.... 597,959 Total Government equity.... 1,079,686 1,097,477 1,116,554 1,136,071 14 Analysis of Government Equity (in thousands of dollars) 24,097 15,097 34,097 1 144,207 1 109,213 103,408 919, 171 983,243 1,017,565 Undisbursed loan obligations 1. Total Government equity.... 1,079,686 1,097,477 1,116,554 1,136,071 1 The changes in these items are reflected on the program and financing schedule. Identification code 05-60-4104-0-3-352 Program by activities: Operating costs, funded: 1. Administrative expenses. Total operating costs, funded.. EMERGENCY CREDIT REVOLVING FUND Program and Financing (in thousands of dollars) Capital outlay, funded: 3. Loans made: Emergency loans.......... Total capital outlay, funded.................. Total program costs, funded.. Total obligations..... 21.98 Unobligated balance available, start of year.. 24.98 Unobligated balance available, end of year.. New obligational authority. Financing: Receipts and reimbursements from non- Proceeds from sale of acquired prop erty.... Payments on judgments. Revenue.... 71 end of year. Relation of obligations to expenditures: Total obligations... Cash transactions: Gross expenditures.. 1964 actual 356,498 362,556 342,366 4,205 4,501 1965 estimate 50,646 1966 estimate Financing the program.-No new budgetary authorization is required for 1966. A net loss of $4.4 million is estimated on an accrual basis. Expenditures are estimated to exceed receipts by $5.9 million on a cash basis due primarily to excess loans made over receipts during the year. During 1966, the program will be wholly financed by receipts from operations of the revolving fund. Operating results and financial condition.-Revenue for 1966, consisting principally of interest on loans, is estimated at $2.4 million, compared to expenses of $6.8 A -62.115-49,139 -60,569 million, resulting in an estimated loss of $4.4 million. Balances of selected resources are identified on the statement of financial condition. Loans may be made outside of such areas to eligible applicants who have suffered severe production losses not general to the area. Loans also may be made to previously indebted borrowers to permit orderly repayment of such indebtedness. emergency loans in areas where agricultural credit is not readily available because of natural disasters. Loans are generally confined to areas designated as emergency areas. Loans (a) Emergency loans.-Emergency loans are made at 3% interest to eligible farmers, ranchers, or oyster planters and to domestic corporations or partnerships engaged primarily in farming, ranching, or oyster planting. Loans are made for any authorized purposes for which operating, farm ownership, or soil and water loans may be made by the Farmers Home Administration. (b) Other loans.-Where necessary to protect the Government's investment, obligations are incurred in connection with outstanding loans to provide for payment of such costs as taxes and insurance. Such advances are charged to the borrowers' accounts. Administrative expenses. The principal administrative expenses are related to the loan programs of the Farmers Home Administration. These expenses are estimated at $4.3 million in 1965 and 1966. Administrative expenses for the Office of the General Counsel are estimated at $22 thousand in 1965 and 1966. This fund is authorized by subtitle C of the Consolidated 1964 actual 2.245 -6,141 -3,896 19 19 38 -37 1 -3.895 1965 1966 estimate estimate -4,813 -4,430 -89,920-93,816-98,629 1,992 -6,805 2,357 -6,787 -4,813 -4.430 -93,816-98,629 -103.059 1968 este $9,10 Financing.-Net repayments to the Treasury in 1966 are estimated at $11.8 million and in 1965 at $16 million. Operating results and retained earnings.-Total revenue, consisting principally of loan insurance charges is estimated at $8.8 million in 1966, an increase of about $1.2 million from 1965. Outstanding loans receivable of $72.4 million are estimated at June 30, 1966. Retained earnings, available to cover future losses, are estimated to be $20.7 million at the end of 1966. These earnings, when added to the $1 million appropriation and estimated borrowings of $52.8 million from the Treasury, represent a $74.5 million Government investment. Legislation will be proposed for establishing a Rural housing insurance fund which will be used to insure the farm labor housing and rental housing for the elderly loans presently insured through this fund. This fund is used to insure farm ownership loans, soil and water loans, farm labor housing loans and loans for rental housing for the elderly, as authorized by subtitle A of the Consolidated Farmers Home Administration Act. of 1961, and sections 514 and 515(b) of title V of the Housing Act of 1949. The insurance endorsement on each insured loan includes an agreement by the Government to purchase the loan after a specified initial period of not less than 3 years, at the holder's option. The initial fund of $1 million is supplemented by loan insurance charges collected from insured loan borrowers and by borrowing from the Secretary of the Treasury. A portion of such loan insurance charges equal to at least onehalf of 1% of the outstanding principal obligations must be deposited to the fund to cover losses. The remainder of such charges may be used for administrative expenses. Loans other than farm labor housing loans may be made. directly from the fund from available receipts or borrowings from the Treasury for the purpose of acquiring blocks of loans if there is reasonable assurance that the loans can be sold to investors without undue delay. With respect to loans made from this fund, not more than $25 million for farm ownership and soil and water loans and not more than $10 million for loans for rental housing for the elderly may be held in the fund at any one time. Interest paid the Secretary of the Treasury on borrowings is based on the current average market yield of outstanding marketable obligations of the United States having maturities comparable to the notes issued for borrowings from the Treasury for operation of the fund. Budget program.-Capital outlay is estimated at $308.7 million in 1966, an increase of $39 million over 1965 and an increase of $92.7 million over 1964. Included in capital outlay is $147.7 million in 1965 and $153.2 million in 1966 for making loans from the fund which will later be sold on an insured basis. The increase in 1965 and 1966 in sale of loans from the fund is expected to result from the relatively favorable market for insured loans. Insured loans outstanding which are contingent liabilities against the insurance fund are expected to increase from $578.3 million on June 30, 1964, to approximately $788 million at June 30, 1965, and to $968 million by June 30, 1966. Total charges against authority. Unused insurance authority.. Farm labor housing loans: Annual insurance authority...-- Charges against insurance authority Total charges against authority. Unused insurance authority. Rental housing for senior citizens: Loans insured.. Commitments to insure pending advances by lenders... Total loans.. Operating program: Revenue... Expense... 200,000 171,589 28,382 199,971 29 Net book value of assets sold. 25,000 689 195 884 24,116 291 407 698 Net operating income.. Nonoperating income or loss: Proceeds from sale of acquired property: Exchanged for loans receivable. Total proceeds from sale of acquired property.. Net nonoperating loss.... Net income for the year.... Analysis of retained earnings, start of year... Retained earnings, end of year.. 1965 estimate 1966 estimate 1964 actual 200,000 195,600 4,400 200,000 146 127 25,000 5,805 195 6,000 19,000 4,600 400 5,000 Revenue, Expense, and Retained Earnings (in thousands of dollars) 1965 1966 estimate estimate 6,789 7,620 3,414 3,375 200,000 150 125 195,600 4,400 200,000 273 275 -296 -300 -23 -25 3,352 2,315 12,886 16,238 16,238 25,000 9,805 195 10,000 15,000 14,600 400 15,000 8,820 5,280 6,597 2,340 2,223 200 200 400 -450 -50 2,173 18,553 18,553 20,726 |
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