Title 12 — Banks and BankingRelease 119-73not60
§1735c General Insurance Fund
Title 12 › Chapter 13— NATIONAL HOUSING › Subchapter V— MISCELLANEOUS › § 1735c
Summary
Creates a General Insurance Fund to be used starting August 10, 1965, as a revolving account for carrying out the insurance programs in this chapter, except for the items listed later. Mortgages and loans insured under commitments on or after August 10, 1965, and loans reported for insurance under section 1703 on or after that date, must be covered by this Fund. The Secretary must move into the Fund the existing insurance accounts and their debts and assets (except the Mutual Mortgage Insurance Fund), outstanding insurance commitments and insured mortgages and loans made before August 10, 1965, and loans made under section 1703 before that date. Costs tied to mortgages and loans the Fund covers may be paid from the Fund. Extra Fund money must be held by the U.S. Treasury or invested in U.S. government bonds, preferably those that help the housing mortgage market. The Secretary, with Treasury approval, may buy and cancel the Fund’s debentures. Premiums, fees, property receipts, and earnings go into the Fund. The Fund pays debenture principal and interest, insurance payments, and expenses for managing or selling acquired properties. The Fund does not cover certain named provisions (including section 1709, parts of 1715e, 1715n(e), 1715x(a)(2), 1715z, 1715z–1, and 1715z–2) except as the Secretary decides. The Secretary must do a yearly risk review of the Fund’s insurance programs and report the results to Congress in the FHA Annual Management Report.
Full Legal Text
Title 12, §1735c
Banks and Banking — Source: USLM XML via OLRC
(a)There is hereby created a General Insurance Fund which shall be used by the Secretary, on and after August 10, 1965, as a revolving fund for carrying out all the insurance provisions of this chapter with the exception of those specified in subsection (e). All mortgages or loans insured under this chapter pursuant to commitments issued on or after August 10, 1965, except those specified in subsection (e), and all loans reported for insurance under section 1703 of this title on or after August 10, 1965, shall be insured under the General Insurance Fund. The Secretary shall transfer to the General Insurance Fund—
(1)the assets and liabilities of all insurance accounts and funds, except the Mutual Mortgage Insurance Fund, existing under this chapter immediately prior to August 10, 1965;
(2)all outstanding commitments for insurance issued prior to August 10, 1965, except those specified in subsection (e);
(3)the insurance on all mortgages and loans insured prior to August 10, 1965, except insurance specified in subsection (e); and
(4)the insurance of all loans made by approved financial institutions pursuant to section 1703 of this title prior to August 10, 1965.
(b)The general expenses of the operations of the Department of Housing and Urban Development relating to mortgages and loans which are the obligation of the General Insurance Fund may be charged to the General Insurance Fund.
(c)Moneys in the General Insurance Fund not needed for the current operations of the Department of Housing and Urban Development with respect to mortgages and loans which are the obligation of the General Insurance Fund shall be deposited with the Treasurer of the United States to the credit of such Fund, or invested in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States or any agency of the United States: Provided, That such moneys shall to the maximum extent feasible be invested in such bonds or other obligations the proceeds of which will be used to directly support the residential mortgage market. The Secretary may, with the approval of the Secretary of the Treasury, purchase in the open market debentures issued as obligations of the General Insurance Fund or issued prior to August 10, 1965, under other provisions of this chapter, except debentures issued under the Mutual Mortgage Insurance Fund. Such purchases shall be made at a price which will provide an investment yield of not less than the yield obtainable from other investments authorized by this section. Debentures so purchased shall be canceled and not reissued.
(d)Premium charges, adjusted premium charges, and appraisal and other fees received on account of the insurance of any mortgage or loan which is the obligation of the General Insurance Fund, the receipts derived from the property covered by such mortgages and loans and from the claims, debts, contracts, property, and security assigned to the Secretary in connection therewith, and all earnings on the assets of the Fund shall be credited to the General Insurance Fund. The principal of, and interest paid and to be paid on, debentures which are the obligation of such Fund, cash insurance payments and adjustments, and expenses incurred in the handling, management, renovation, and disposal of properties acquired, in connection with mortgages and loans which are the obligation of such Fund, shall be charged to such Fund.
(e)The General Insurance Fund shall not be used for carrying out the provisions of section 1709 of this title, except as determined by the Secretary, or the provisions of section 1715e of this title to the extent that they involve mortgages the insurance for which is the obligation of the Cooperative Management Housing Insurance Fund created by section 1715e(k) of this title, or the provisions of section 1715n(e), 1715x(a)(2), 1715z, 1715z–1 and 1715z–2 11 See References in Text note below. of this title; and nothing in this section shall apply to or affect any mortgages, loans, commitments, or insurance under such provisions.
(f)The Secretary shall undertake an annual assessment of the risks associated with each of the insurance programs comprising the General Insurance Fund, and shall present findings from such review to the Congress in the FHA Annual Management Report.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
section 1715z–2 of this title, referred to in subsec. (e), was repealed by Pub. L. 110–289, div. B, title I, § 2120(a)(6), July 30, 2008, 122 Stat. 2835.
Amendments
2008—Subsec. (e). Pub. L. 110–289 substituted “1709 of this title, except as determined by the Secretary” for “1709(b) (except as provided in section 1709(v)), (h), and (i) of this title”. 1994—Subsec. (f). Pub. L. 103–233, § 105(b), redesignated subsec. (g) as (f) and struck out former subsec. (f) which read as follows: “There are authorized to be appropriated such sums as may be necessary to cover losses sustained by the General Insurance Fund.” Subsec. (g). Pub. L. 103–233, § 105(b)(2), redesignated subsec. (g) as (f). Pub. L. 103–233, § 103(g)(2), added subsec. (g). 1992—Subsec. (e). Pub. L. 102–550 inserted “(except as provided in section 1709(v))” after “1709(b)”. 1983—Subsec. (f). Pub. L. 98–181 inserted “such sums as may be necessary” after “appropriated”, and struck out “not to exceed $1,738,000,000, which amount shall be increased by $126,673,000 on
October 1, 1981” after “Insurance Fund”. 1981—Subsec. (f). Pub. L. 97–35 inserted provision increasing authorization on Oct. 1, 1981. 1980—Subsec. (f). Pub. L. 96–399 substituted “$1,738,000,000” for “$1,341,000,000, which amount shall be increased by $165,000,000 on
October 1, 1978, which shall be increased by not to exceed $93,000,000 on
October 1, 1979”. 1979—Subsec. (f). Pub. L. 96–153 provided for an increase of $93,000,000 on
October 1, 1979. 1978—Subsec. (f). Pub. L. 95–557 inserted “which amount shall be increased by $165,000,000 on
October 1, 1978”. 1977—Subsec. (f). Pub. L. 95–24 substituted “$1,341,000,000” for “$500,000,000”. 1976—Subsec. (f). Pub. L. 94–375 added subsec. (f). 1970—Subsec. (c). Pub. L. 91–609 provided for guarantee as to principal and interest by any agency of the United States and for investment of moneys in bonds or other obligations the proceeds of which will be used to directly support the residential mortgage market. 1968—Subsec. (e). Pub. L. 90–448 prohibited use of Fund for carrying out provisions of section 1715n(e), 1715x(a)(2), 1715z, 1715z–1 and 1715z–2 of this title. 1967—Pub. L. 90–19 substituted “Department of Housing and Urban Development” for “Federal Housing Administration” wherever appearing in subsecs. (b) and (c) of this section and “Secretary” for “Commissioner” in subsecs. (a), (c), and (d) of this section, respectively.
Statutory Notes and Related Subsidiaries
Effective Date
of 1981 AmendmentAmendment by Pub. L. 97–35 effective Oct. 1, 1981, see section 371 of Pub. L. 97–35, set out as an
Effective Date
note under section 3701 of this title.
Reference
Citations & Metadata
Citation
12 U.S.C. § 1735c
Title 12 — Banks and Banking
Last Updated
Apr 3, 2026
Release point: 119-73not60