Related Publications Testimony on Estimates of the Cost of the Credit Programs of the Export-Import

Related Publications Testimony on Estimates of the Cost of the Credit Programs of the Export-Import Bank June 25, 2014 Fair-Value Estimates of the Cost of Federal Credit Programs in 2013 June 28, 2012 Fair-Value Accounting for Federal Credit Programs March 05, 2012 FHA s Single-Family Mortgage Guarantee Program: Budgetary Cost or Savings? October 21, 2013 How FHA s Mutual Mortgage Insurance Fund Accounts for the Cost of Mortgage Guarantees October 22, 2013 Accounting for FHA's Single-Family Mortgage Insurance Program on a Fair-Value Basis May 18, 2011
CBO has estimated the budgetary costs of the Department of Education s student loan programs, the Export-Import Bank s (Ex-Im Bank s) credit programs, and the Federal Housing Administration s (FHA s) single-family mortgage guarantee program using two different approaches. In one, cost is based on an estimate of the market value of the federal government s obligations, termed a fair-value approach. Those estimates are compared with ones reflecting the procedures currently tj sp used in the federal budget as prescribed by the Federal Credit Reform Act of 1990 (FCRA). CBO s fair-value tj sp and FCRA estimates are based on the program terms and outcomes including tj sp the volume and amount of lending, tj sp fees, and borrowers rates of repayment and default that are expected to prevail under current law.
For fiscal years 2015 to 2024, CBO found that under current law: The Department of Education s four largest student loan programs would yield budgetary savings of roughly $135 billion under FCRA accounting tj sp but cost roughly $88 billion on a fair-value basis (see the figure below); Ex-Im Bank s six largest programs tj sp would generate budgetary savings of $14 billion under FCRA accounting but cost $2 billion on a fair-value basis; and FHA s single-family mortgage guarantee program would provide budgetary tj sp savings of $63 billion under FCRA accounting but cost $30 billion on a fair-value basis.
CBO used its own projections of the volume of loans and cash flows for the Department of Education s student loan programs and FHA s single-family mortgage guarantee program because those estimates are a routine part of its baseline budget projections. However, tj sp because CBO does not ordinarily project the detailed cash flows required to estimate the costs for most other federal credit programs, CBO relied on the Export-Import Bank s projections of those cash flows for this analysis of the bank s programs.
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