• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Ineligible Borrowers Got Hundreds of Millions in Stimulus Home Loans

    The Agriculture Department’s Rural Housing Service likely loaned hundreds of millions of dollars to ineligible borrowers as part of President Obama’s stimulus package, a report by federal watchdogs has revealed.

    The stimulus earmarked more than $1 billion for RHS home loans in rural communities. According to the Ag Department’s Inspector General, up to $292.3 million of those loans may have financed ineligible projects, or gone to borrowers that did not meet the loan program’s requirements due to their potential inability to repay the loans.

    The IG examined a sample of 100 RHS stimulus loans, and found that 17 had been extended to borrowers who “(1) had no history of stable and dependable income, (2) had a credit history that did not indicate the ability and willingness to repay a loan, or (3) did not meet repayment ability guidelines.”

    Six loans in the report’s sample financed properties that did not meet the program’s eligibility requirements. Some “lacked sufficient documentation that the homes were decent, safe, and sanitary,” according to the report.

    The IG extrapolated with 95% certainty that between 1,111 and 2,433 loans totaling between $124.3 million and $292.3 were made to ineligible borrowers or projects. The report faulted RHS personnel for the oversight.

    Rural Development field-level personnel made these questionable determinations because they were not sufficiently trained on how to either conduct or adequately document proper determinations; did not have an effective second party review process in place to catch errors; and did not have sufficient guidance on the characteristics and requirements needed for a property to become eligible.  Rural Development conducted a follow-up review of the questionable loans and agreed that they were not fully processed in accordance with regulations or handbook requirements.

    Read the entire report here:

    Posted in Ongoing Priorities, Scribe [slideshow_deploy]

    11 Responses to Ineligible Borrowers Got Hundreds of Millions in Stimulus Home Loans

    1. KJinAZ says:

      Do we need anymore proof that government should not run anything. This is fraud pure and simple. Every government worker who signed off on these loans should be jailed. If you worked at a bank and did these things, then you would go to jail. Government workers are not above the law, and in my opinion should be held to an even higher standard because they are controlling public funds and not private funds.

      Since many of these loans were obtained fraudulently they can call the loans due now. I am certain there is verbiage in the loan docs that spell this out. FRAUD IS A CRIME!

    2. Bobbie says:

      never trust a politician that admits lying is what makes a politician and always vet before he becomes President. Exactly why democratic run states overtax to cover their constituents they give special favor to with a clear sense of inferiority. People not taking equal accountabilities to their dealings in society and the government encouraging it is what is destroying the nature of this country. Do the people of America need social justice against the government that’s corrupting America, governing their selected ones with the money from people the government resents through indignant, indecent government corruption?!

      Where is the “right” to infringe costs on people uninvolved, constituted?

      Democrats have proven not to be trusted in any way. Everything they’re behind is corrupt and unconstitutional. Would America be in the shape she is if she were less these things! ABSOLUTELY NOT! THE democratic party has got to go!

      People participating in society has to have equal accountabilities or America is no more and all government officials accountable to unlawful discriminating favoritism needs to be held accountable to all the money wrongfully distributed especially to the billions that hasn’t been found! Every unlawful government act is the President’s responsibility along with the state of this countries dysfunction.

      • goon48 says:

        THE democratic party has got to go!

        I agree but we have to stop replacing them with big spending RINO'S that get all mushy when ever the democrats push back against them.

      • AlfromFl says:

        I agree. But we also need people (like those that made the loans) to stand up for what is ethical and correct and refuse to make such loans.

        • Bobbie says:

          well AlfromFl, thank you for agreeing but I don't know how or why a person can or would sign a contract they can't pay back? Especially today when there is so much help through government resources for people and who are immigrants new to the country, regarding estate purchases they don't have to go to family that have already experienced it, they go directly to government. I'm confident it isn't immigrants who are wise to the corruptions they were forced to live under their government/ businesses.

          There's plenty of things that tempt us in life. It's a test to ourselves to restrict ourselves or learn from our mistakes. No one has the right to infringe the consequences of their personal decisions on people who's responsibility it isn't.

          It's the signers' responsibility that the stimulus loans will intentionally devalue personal signatures. DANGEROUS!

          When we bought our house it was the same. They insisted we borrow more but my husband didn't give in. We would hold ourselves accountable had we. It's how the market works and why equal rules have to apply and honored by those that participate in the economy or there's going to be unfair consequences. oh wait, huh…

          I think it's more ethical people are wiser not to sign things they can't hold themselves responsible to.

    3. Chris in N.Va. says:

      An inability to pay back seems to be an essential criterion of this (mis)administration and big-government "groupies".

      Fannie-Mae's carte blanche home mortgage loans-for-peanuts giveaways; all of the Greenie Weenie wet-dream Government-guaranteed (we-the-people-as-stuckee) loans to "green" companies that should never have been allowed to receive them from any rational lender; our government's having to borrow 40-plus cents of every dollar it spends; even the campaign of Ozymandias-on-the-Potomac's spending more than it's already taken in.

      At least they're consistent (not unlike Thelma and Louise's pedal-to-the-metal rush towards the cliff edge can be called "consistent"…)

    4. msoto says:

      It was setup this way, just like the addional child credit scandal with the IRS. The Fed Gov is doing all it can to run up it's debt b/c they know they will never pay it back. Sickening.

    5. Jenny says:

      Obama gave these loans to illegal aliens, lots of them. it was just another way to bleed the US dry. These same illegals in California, Texas, Arizona and New Mexico have been told by Obama's flunkies that they are a special protected class, that they can't be arrested or subjected to US law.

    6. SungoSang says:

      See I never even thought about it like that man. Wow. http://www.Privacy-Peeps.tk

    7. SungoSang says:

      That makes a lot of sense dude.


    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.