Pursuit's Take
The estimated credit subsidy costs (expected net lifetime costs) of single-family mortgages guaranteed by the Department of Agriculture’s (USDA) Rural Housing Service (RHS) substantially increased in recent years, partly due to high losses from the 2007 through 2011 housing crisis. For example, the fiscal year 2013 and 2014 reestimates (which federal agencies must do annually) indicated higher expected costs of $804 million and $615 million, respectively, compared with the prior reestimates.
From 2007 through 2014, the amount of outstanding RHS guarantees grew from less than $20 billion to more than $100 billion. At the same time, the estimated long-term costs of the guarantee program—known as credit subsidy costs—have risen.