Audit: $4B in USDA Stimulus Loans May Be Erroneous

January 7, 2011 - 7:36 PM

Washington (AP) - An internal Agriculture Department report says the government may have given out more than $4 billion in stimulus housing loans to ineligible borrowers.

A preliminary report from the USDA inspector general made available Friday says a sample of 100 loans out of 81,000 showed that almost a third were given to ineligible borrowers - including some with income that exceeded the program limits, others who already owned homes and borrowers who purchased homes with swimming pools. The loans were paid for by the 2009 economic stimulus.

The inspector general's report says the loans precluded other, eligible borrowers from receiving the help. Based on the sample results, the report estimates that 27,206 loans worth about $4 billion - or more than a third of those granted - could be ineligible.