Economic analysis of AID"s housing guaranty program

government provides a full guaranty against default on loans made by private U.S. investors to host countries for investment in their housing sectors. The program, which is designed to support itself from fees charged to the host country as part of the loan terms, was changed significantly in 1970 by adding a host country guaranty of repayment to the requirements for a loan. This report presents an economic analysis of the Housing Guaranty Program from four perspectives: (1) the program"s relation to U.S. credit markets, and in particular to the standards established in the Office of Management and Budget"s Circular A-70 on Federal credit policy; (2) the program"s effects on the host country, especially at the macro-economic level; (3) the program"s relation to developing country urban housing problems; and (4) the use of the Housing Guaranty mechanism as a foreign assistance tool. (Author abstract, modified)