Audit of USAID/Thailand"s housing guaranty program

Audit report covers the period 7/80-6/89 and is based in part on interviews with intermediate credit and government housing officials, as well as beneficiaries. A number of operational problems have prevented the program from fully achieving its purpose. Program-financed units had high rates of vacancy and mortgage payment arrearage. Also, ineligible persons purchased several low-income, multi-unit properties. Because the National Housing Authority (NHA) had not corrected these problems, many of the targeted beneficiaries - the urban poor - were not provided improved shelter. At Bang Plee, 1,256 of the 3,162 low-cost housing units were never occupied and the owners of 1,300 units were in arrears on payments due to the NHA. Of 11 owners interviewed, 8 were found not to be documented original owners. At Lad Krabang, 636 of the 2,572 low-income housing units had never been occupied, while the owners of some 1,400 units were a total of $780,000 in arrears on mortgage payments. Evidence existed of informal ownership contracting to avoid ownership transfer charges. In addition, investors had acquired a number of low-income units at Lad Krabang. The fact that investors were permitted to purchase housing at program sites indicates that the 1980 program implementation agreement may have been breached by the NHA. It is recommended that the Regional Housing and Urban Development Office/Asia: (1) determine whether the NHA materially breached the 1980 program implementation agreement by allowing investors to purchase low-income property with loans guaranteed by the program; (2) take action in accordance with Section 8.01 ("Suspension and Acceleration") of the program implementation agreement if it is determined that a material breach of agreement occurred; and (3) notify the NHA of A.I.D."s concern regarding high vacancy rates and large mortgage payment arrearages.