Title 12 — Banks and BankingRelease 119-73

§1747d Excess earnings used for amortization of original investment

Title 12 › Chapter CHAPTER 13— - NATIONAL HOUSING › Subchapter SUBCHAPTER VII— - INSURANCE FOR INVESTMENTS IN RENTAL HOUSING FOR FAMILIES OF MODERATE INCOME › § 1747d

Last updated Apr 6, 2026|Official source

Summary

For insurance contracts under this part, up to half (50%) of any extra earnings in a given year can be used—on top of the required minimum return—to pay returns on the outstanding investment, but only so that total return does not exceed 5% of that investment for the year. Any remaining extra earnings must, besides the required yearly amortization, be used to pay down the outstanding investment over time. If past years had losses (income less than expenses), extra earnings must first make up those shortfalls (excluding any premium charges that were previously waived) and then pay any waived premium charges.

Full Legal Text

Title 12, §1747d

Banks and Banking — Source: USLM XML via OLRC

For all of the purposes of any insurance contract made pursuant to this subchapter, 50 per centum of the excess earnings, if any, for any operating year may be applied, in addition to the minimum annual return, to return on the outstanding investment but only to the extent that such application thereof does not result in an annual return of more than 5 per centum of the outstanding investment for such operating year, and the balance of any such excess earnings shall be applied, in addition to the minimum annual amortization charge, to amortization of the outstanding investment: Provided, That if in any preceding operating years the gross income shall have been less than the operating expenses, such excess earnings shall be applied to the extent necessary in whole or in part, first, to the reimbursement of the amount of the difference between such expenses (exclusive of any premium charges previously waived hereunder) and such income, and, second, to the payment of any premium charges previously waived hereunder.

Reference

Citations & Metadata

Citation

12 U.S.C. § 1747d

Title 12 — Banks and Banking

Last Updated

Apr 6, 2026

Release point: 119-73