Table 4.--LOAN GUARANTEES: ASSUMPTIONS ___________________________________________ _ ________ _ _________ _ ________ _ Composition of Subsidy _________ _ ________ _ Agency, Bureau, Program and Risk Subsidy Category rate Defaults net of Interest recoveries ___________________________________________ _ ________ _ _________ _ ________ _ Department of Agriculture Farm Service Agency: CCC Export Guarantee Loans Program........................................................................................................................9.26 9.89 ................ Agricultural Credit Insurance Fund: Farm Ownership................................................................................................................................................................................................................. 1.59 2.69 ................ Farm Operating--Unsubsidized................................................................................................................................................................................................................. 1.16 2.10 ................ Farm Operating--Subsidized................................................................................................................................................................................................................. 8.74 2.20 7.49 Rural Community Advancement Program: Business and Industry Loans..........................................................................................................................1.02 2.80 ................ Community Facility Loans................................................................................................................................................................................................................. -0.54 0.29 ................ Water and Waste Disposal Loans..........................................................................................................................-1.08 8.59 ................ Rural Housing Service: Rural housing insurance fund: Section 502 Single Family Housing........................................................................................................................0.09 1.13 ................ Section 538 Multi-Family Housing--Subsidized.....................................................................................................................3.10 1.39 6.53 Department of Defense Procurement: Defense Export Loan Guarantee Program........................................................................................................................................ -9.64 ................ ARMS Initiative Guaranteed Loans..........................................................................................................................0.95 2.78 ................ Family Housing: Military Housing Improvement Fund...........................................................................................................................5.99 5.99 ................ Department of Education Office of Postsecondary Education: Federal Family Education Loan Program: Weighted average of total commitments....................................................................................................................13.32 5.09 10.02 Consolidated................................................................................................................................................................................................................. 3.41 7.94 0.08 PLUS................................................................................................................................................................................................................. 6.05 3.78 2.41 Subsidized Stafford................................................................................................................................................................................................................. 21.02 4.52 18.12 Unsubsidized Stafford................................................................................................................................................................................................................. 7.80 5.26 4.21Department of Health and Human Services Health Resources and Services Administration: Health Centers Loan Guarantees: Health Centers: Facilities Loans..........................................................................................................................2.26 3.21 ................ Health Centers: HMO Plan Loans..........................................................................................................................5.11 6.06 ................ Health Centers: HMO Network Loans..........................................................................................................................8.59 9.53 ................ Department of Housing and Urban Development Public and Indian Housing Programs: Indian Housing Loan Guarantee......................................................................................................................8.13 9.13 ................ Title VI Indian Federal Guarantees Program........................................................................................................................11.07 11.07 ................ Community Planning and Development: Community Development Loan Guarantees (Section 108)...........................................................................................................................2.30 2.30 ................ Housing Programs: FHA General and Special Risk Insurance Fund: Multifamily development................................................................................................................................................................................................................. 7.09 12.31 ................ Section 221(d)(3): cooperatives................................................................................................................................................................................................................. 17.99 19.05 ................ Tax Credit New Construction................................................................................................................................................................................................................. -0.88 4.80 ................ Mixed Income................................................................................................................................................................................................................. 12.13 17.43 ................ Multifamily Refinance................................................................................................................................................................................................................. -0.78 4.15 ................ Section 241supplemental loans..........................................................................................................................17.06 20.80 ................ Multifamily operating loss loans..........................................................................................................................25.15 27.60 ................ Health Care and Nursing Homes..........................................................................................................................-0.70 .................. ................ Hospitals................................................................................................................................................................................................................. 1.53 7.02 ................ Title 1: Property Improvements................................................................................................................................................................................................................. -1.22 1.55 ................ Manufactured Housing................................................................................................................................................................................................................. -3.13 2.29 ................ Section 234: condominiums................................................................................................................................................................................................................. -1.32 2.61 ................ Section 203(k) Rehabilitation Mortgage.......................................................................................................................-1.32 2.61 ................ FHA Mutual Mortgage Insurance Fund: FHA Mutual Mortgage Insurance......................................................................................................................-2.62 1.80 ................ Government National Mortgage Association: Guarantees of mortgage-backed securities.....................................................................................................................-0.42 0.01 ................ Department of the Interior Bureau of Indian Affairs: Indian Guaranteed Loan Program........................................................................................................................7.54 6.71 2.79 Department of Transportation Maritime Administration: Maritime Guaranteed Loan Program:Weighted Average................................................................................................................................................................................................................. 5.01 9.90 ................ Risk Category Level 1A................................................................................................................................................................................................................. 1.25 6.14 ................ Risk Category Level 1B................................................................................................................................................................................................................. 1.75 6.64 ................ Risk Category Level 1C................................................................................................................................................................................................................. 2.25 7.14 ................ Risk Category Level 2A................................................................................................................................................................................................................. 3.75 8.64 ................ Risk Category Level 2B................................................................................................................................................................................................................. 5.25 10.14 ................ Risk Category Level 2C................................................................................................................................................................................................................. 6.75 11.64 ................ Risk Category Level 3................................................................................................................................................................................................................. 11.75 16.64 ................ Department of Veterans Affairs Veterans Benefits Administration: Veterans Housing Benefit Program........................................................................................................................0.46 7.36 ................ International Assistance Programs Agency for International Development: Urban Environmental Credit Program........................................................................................................................10.24 20 16.29 ................ Micro and Small Enterprise Development Program........................................................................................................................3.79 6.61 ................ Development Credit Authority................................................................................................................................................................................................................. 6.26 9.32 ................ Overseas Private Investment Corporation: OPIC Guaranteed Loans................................................................................................................................................................................................................. 1.50 10.02 ................ Small Business Administration General Business Loan Programs: Section 7(a) General Business Guaranty (current law)...........................................................................................................................1.39 4.59 ................ Section 7(a) General Business Guaranty --DELTA..........................................................................................................................2.08 5.28 ................ Section 504 Certified Development Companies Program........................................................................................................................................ 3.76 ................ Section 504 Certified Development Companies --DELTA..........................................................................................................................1.29 4.32 ................ Section 7(m) Microloan Guaranty.......................................................................................................................7.97 1.67 ................ SBIC --Debentures................................................................................................................................................................................................................. 1.38 11.00 ................ SBIC --Participating Securities.....................................................................................................................2.19 6.55 ................ Other Independent Agencies Export-Import Bank of the United States: Short, Medium, and Long-Term Guarantees and Insurance Programs.......................................................................................................................5.81 26 9.93 ................ ___________________________________________ _ ________ _ _________ _ ________ _ \1\ Lifetime defaults as a percentage of disbursements. \2\ Recoveries as a percentage of lifetime defaults. \3\ Includes total recoveries. \4\ Of the amount paid out, this represents the portion recovered due to fraud, cancellations or revisions. Disposition foreclosed property is the responsibility of the lender. The recovery is realized by the lender and the agency difference between that recovery and the amount guaranteed. \5\ 70% is increased 1% each year over 16 years of projected loss settlements. \6\ 35% of loan principal will receive interest credit of an estimated 1.5% , reducing effective rate to 5.67%. \7\ On oustanding principal balance.\8\ Reflects the weighted average interest rate for non-consolidated loans. \9\ The percent of principal guaranteed by the Government is 98% for private lenders and 95% for guaranty \10\ Rates are set at the weighted average rate of the loans consolidated, rounded up to the nearest eighth of \11\ Includes a maximum three year deferment. For consolidated loans (made in-school) and Stafford loans, month grace period. \12\ The Student Loan Marketing Association pays the U.S. Department of Education a fee that is specified in fee is calculated on an annual basis in an amount equal to 0.30 percent of the principal amount of each loan or guaranteed under the FFEL program that the Association holds, provided that loans were acquired on or 1993 (the date of enactment of the Student Loan Reform Act, which created the fee). \13\ Rates shown are those set beginning July 1 of the previous fiscal year. \14\ Borrower's interest rate will be based on prevailing market rates. \15\ Other fees includes construction mortgage insurance premiums paid at initial endorsements. \16\ Upfront fees apply to 30 year purchase mortgages. They are reduced for 15 year mortgages and for first who receive housing counseling. A further reduction for center city homebuyers is planned. \17\ Annual fees are charged for varying lengths of time based on loan-to-value ratio, length and type of the \18\ Borrowers are charged a fee based on downpayment size --2.2% for no downpayment, 1.5% for a 5% downpayment, for a 10% downpayment. \19\ Maximum amount is $50,000. \20\ These amounts differ from the President's budget estimates due to changes in the non-sovereign IFI risk the budget estimates were prepared. \21\ OPIC will begin tracking the borrower's rate in FY 1999. \22\ The 504 program has two possible maturities: 10 or 20 years. The 504 model separately analyzes the cash with each maturity. The credit supplement shows the weighted average values for each variable. \23\ The balance used to calculate annual fees is adjusted on a 5 year anniversary basis. \24\ Collections and expenses are analyzed separately. Recoveries represent collections from defaulted loans. \25\ There is a 1% fee on the amount of leverage outstanding. \26\ Estimate based on average loan size for FY 1998. \27\ Represents 6 month Libor rate plus 50 basis points. \28\ Represents weighted average for all guarantee programs.GUARANTEES: ASSUMPTIONS UNDERLYING THE FY 1999 SUBSIDY ESTIMATES (in percentages, unless noted otherwise) ________ _ ________ _ ________ _ ________ _ ________ _ ________ _ ________ _ Composition of Subsidy Loan Characteristics ________ _ ________ ________ _ ________ _ ________ _ ________ _ ________ _ All Loan Borrower Grace Upfront Annual Fees other maturity rate period fees fees (years) (years) ________ _ ________ _ ________ _ ________ _ ________ _ ________ _ ________ _ -0.63 ................ 3 ................ ................ 1.00 ................ -0.90 -0.20 20 9.36 ................ 1.00 ................ -0.90 -0.04 4 9.04 ................ 1.00 ................ -0.09 -0.05 4 9.04 ................ 1.00 ................ -1.54 -0.24 16 9.75 ................ 1.93 ................ -0.80 -0.03 19 6.66 ................ 1.00 ................ -0.80 -8.87 25 6.69 ................ 1.00 ................ -1.04 ................ 30 7.17 ................ 1.00 ................ -4.82 ................ 36 7.17 6 ................ 0.90 0.50 7 9.64 ................ 6 5.35 1 0.38 0.12 -1.60 -0.23 10 9.75 ................ 2.00 ................ ................ ................ 30 8.00 ................ ................ ................ -3.80 2.01 9 7.54 8 4 3.05 ................ -5.81 1.20 13 10 4 11 0.50 0.91 -3.61 3.47 10 8.26 13 3 11 3.50 ................ -3.60 1.98 9 7.46 13 4 11 3.50 ................ -3.59 1.92 9 7.46 13 4 11 3.50 ................-0.95 ................ 25 10.00 2 1.00 ................ -0.94 ................ 15 10.00 1 1.00 ................ -0.94 ................ 15 10.00 2 1.00 ................ -1.00 ................ 30 14................ 1.00 ................ ................ ................ 20 14................ ................ ................ ................ ................ 13 6.33 ................ ................ ................ -5.22 ................ 40 ................ ................ 1.30 0.50 -3.93 ................ 40 ................ ................ 1.30 0.50 -5.26 ................ 35 ................ ................ 1.30 0.50 -5.87 ................ 40 ................ ................ 1.30 0.50 -5.47 ................ 35 ................ ................ 0.75 0.50 -3.76 ................ ................ ................ ................ 1.60 0.50 -3.34 ................ 35 ................ ................ 0.30 0.50 ................ ................ 40 ................ ................ 1.30 0.50 -5.49 ................ 25 ................ ................ 1.30 0.50 -2.77 ................ 20 ................ ................ 1.30 0.50 -5.42 ................ 20 ................ ................ 1.30 0.50 -3.93 ................ 30 ................ ................ ................ 0.50 -3.93 ................ 30 ................ ................ ................ 0.50 -5.13 0.71 30 ................ ................ 2.25 16 0.05 17 -0.43 ................ 30 6.00 ................ ................ 0.06 -1.96 ................ 15 7.50 ................ ................ 1.80-4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -4.89 ................ 25 6.50 ................ 4.89 ................ -1.86 -5.05 30 6.14 ................ 2.20 18................ -6.05 ................ 21 6.01 10 1.00 0.50 -2.82 ................ 5 ................ ................ 0.25 0.75 -3.06 ................ 10 6.18 5 0.25 0.50 -8.52 ................ 11 21 2 0.50 2.00 -3.20 ................ 12 9.50 ................ 2.85 0.50 -3.20 ................ 12 9.50 ................ 2.85 0.50 -7.95 4.19 19 22 8.15 ................ 1.20 0.88 23 -7.86 4.83 19 22 8.15 ................ 1.20 0.88 23 ................ 6.30 10 4.71 5 ................ ................ -3.04 -6.58 10 7.90 ................ 3.04 ................ -3.04 -1.32 10 7.90 5 1.20 0.88 -4.12 ................ 5 6.27 27 2 4.21 28 0.12 ________ _ ________ _ ________ _ ________ _ ________ _ ________ _ ________ _ or revisions. Disposition of lender and the agency pays the effective rate to 5.67%.95% for guaranty agencies. the nearest eighth of a percent. and Stafford loans, includes a six that is specified in statute. This amount of each loan made, insured were acquired on or after August 4, mortgages and for first time homebuyers length and type of the original loan. downpayment, 1.5% for a 5% downpayment, and 1.25% non-sovereign IFI risk assessment after separately analyzes the cash flows associated from defaulted loans.________ _ ________ _ ________ _ ________ _ Characteristics ________ _ ________ _ ________ _ ________ Other Default Recovery Percent fees rate\1\ rate\2\ guaranteee ________ _ ________ _ ________ _ ________ _ ................ 4.88 3 ................ 98.00 ................ 5.00 0.30 4 90.00 ................ 6.00 0.30 4 90.00 ................ 6.00 30.00 4 90.00 ................ 3.02 1.00 79.80 ................ 0.37 ................ 80.00 ................ 9.85 ................ 80.00 ................ 1.57 70.00 5 90.00 ................ 2.26 69.00 90.00 9.64 ................ ................ 85.00 ................ 3.04 1.00 80.00 ................ 20.00 47.00 100.00 ................ 17.07 86.98 98.00 9 12 22.02 74.40 98.00 9 12 9.80 73.34 98.00 9 12 15.99 91.75 98.00 9 12 15.53 88.14 98.00 9................ 17.00 74.00 80.00 ................ 19.00 60.00 85.00 ................ 22.00 40.00 90.00 ................ 25.00 8.00 100.00 ................ ................ ................ 80.00 ................ 2.83 54.69 100.00 0.50 15 16.79 54.48 100.00 0.50 15 23.80 58.70 100.00 0.50 15 7.06 75.22 85.00 0.50 15 23.57 30.00 100.00 ................ 6.49 52.42 80.00 0.50 15 37.83 ................ ................ ................ 37.21 ................ 100.00 0.50 15................ 48.11 100.00 ................ 4.01 33.74 100.00 0.50 15 5.76 14.28 90.00 0.50 15 6.51 14.82 90.00 ................ 4.77 55.03 100.00 ................ 6.38 48.42 100.00 ................ 7.87 68.02 100.00 ................ ................ ................ 100.00 ................ 7.50 ................ 88.00................ 36.49 50.00 100.00 ................ 26.62 50.00 100.00 ................ 28.01 50.00 100.00 ................ 28.41 50.00 100.00 ................ 33.32 50.00 100.00 ................ 38.07 50.00 100.00 ................ 42.24 50.00 100.00 ................ 50.34 50.00 100.00 ................ 10.88 ................ 19 ................ 45.75 ................ 100.00 ................ 7.48 ................ 50.00 ................ 16.40 ................ 50.00 ................ 15.00 40.00 100.00 ................ 15.05 60.95 73.37 ................ 15.05 60.95 73.37 ................ 13.31 86.37 24 100.00 ................ 15.31 86.37 100.00 ................ 5.09 50.01 100.00 1.00 25 27.00 54.00 100.00 1.00 25 20.00 50.00 100.00 ................ 12.92 26................ 100.00 ________ _ ________ _ ________ _ ________ _