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U.S. Agrees to Help Finance Homes Built in U.S. for Export to Israel

The Bush administration, under pressure to help U.S. builders gain Israeli contracts for mobile and prefabricated homes, has agreed to match the financing arrangements being made available by other countries seeking the contracts.

Israel is looking to buy thousands of mobile and prefabricated homes from manufacturers abroad to meet a critical housing shortage caused by the influx of immigrants from the Soviet Union and other countries.

The Export-Import Bank, the U.S. agency responsible for helping American firms seeking trade opportunities abroad, wrote Israel’s Finance Ministry on Aug. 16 that it soon would prepare a formal recommendation that would guarantee loans for the first 3,000 U.S.-made homes that the Israeli government purchases.

The assurance, made by Thomas Moran, the bank’s vice president for Europe and Canada, was needed before the Israeli government would allow U.S. firms to bid on the contracts, an Israeli Embassy official explained.

An aide to Sen. Rudy Boschwitz (R-Minn.), who lobbied for the letter, said U.S. government financing of any Israeli housing purchase was needed because the Israeli government does not have “a lot of cash around.”

The bank initially was hesitant to issue the so-called “comfort letter,” because it was unclear whether it was needed following congressional approval this spring of $400 million in housing loan guarantees for Israel.

Although President Bush signed legislation authorizing the guarantees in May, they have not yet been provided to Israel, meaning that it cannot use them to take out loans for the homes it wants to import.

The delay will be discussed when Secretary of State James Baker meets here Sept. 6 or 7 with Israel’s new foreign minister, David Levy.

ISRAEL ELIMINATES IMPORT DUTIES

In a related development, Israel has accepted a U.S. request that it eliminate import duties as high as 12 percent on U.S.-made homes. At biannual trade talks in Jerusalem last month, Israel had balked at the request, on the basis that any trade concession to the United States should be reciprocated somehow.

It now appears that most of the prefabricated homes Israel hopes to import will come from the United States. That at least is what Housing Minister Ariel Sharon told a delegation of American Jewish Committee leaders who met with him in Israel on Aug. 14.

Sharon said that Israel would also purchase a large number of mobile homes from Britain. There were reports from Amsterdam on Wednesday that Israel had also made a bid to a Dutch firm for mobile homes.

Sharon told the AJ Committee delegation that although Israel had found that South Africa makes the cheapest homes, it will not buy them, in compliance with the Cabinet’s 1987 decision to avoid entering into new contracts with Pretoria while apartheid continues.

The Housing Ministry is planning to receive the first homes by the end of September as part of a plan to buy 5,000 mobile homes and 15,000 prefabricated ones, said David Harris, AJ Committee’s director for government and international affairs.

They are in the first installment in a crash program to come up with 500,000 new housing units by 1996. Harris called the 500,000 figure “mind-boggling,” since it would expand by more than a third Israel’s current pool of 1.4 million housing units.

They are needed both for the stream of Soviet immigrants and for those living in tents or on the streets because they could not afford skyrocketing rents, pushed upward by the increased demand for housing.

Sharon told the AJ Committee group that his government had identified 2,204 homeless Israeli families this year, 547 of whom have since found housing.

The AJ Committee delegation in Israel also included Sholom Comay, its president; Shula Bahat, acting executive vice president; Alfred Moses, chairman of the board of governors; and Ron Kronish, director of the Israel office.

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