Summary

GAO evaluated the accomplishments and shortcomings of Federal housing programs in rural America, particularly in the past 10 years. Areas of special concern included the geographic distribution of housing assistance, gaps in program benefits, and ways to improve the programs' effectiveness in providing opportunities for rural families to obtain decent homes. Eighteen counties in six States were selected for study because they contain one or more typical rural housing problems, such as high percentages of substandard homes, a high percentage of rural poor, large areas remote from metropolitan service areas, or high construction costs.

Although the condition of rural housing has significantly improved over the last 30 years, many rural families remain in substandard housing. Rural areas have about one-third of the Nation's population and one-half of the substandard housing. The distribution of Federal housing support between rural and urban areas has not been consistent with the relative need. Department of Housing and Urban Development (HUD) programs have been less successful in rural areas because the major programs were designed for urban areas and are often beyond rural financial or administrative resources. The Farmers Home Administration (FmHA) has provided significant support for rural housing, but much of the housing was constructed near urban areas because program management was demand oriented and relied on builders and realtors to refer clients rather than seeking the more remote areas which had the greatest need. Single family housing support by the Veterans Administration (VA) has been more successful because the agency is authorized to make direct loans in credit deficient areas. Rural families in outlying areas have inadequate access to home mortgage credit. Rural banks are small and reluctant to make long-term housng loans, and savings and loan associations are scarce in rural areas. Neither rural banks nor savings and loan associations make much use of Federal mortgage insurance or guarantee programs.