Title 12 — Banks and BankingRelease 119-73not60

§1747d Excess Earnings Used for Amortization of Original Investment

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

Last updated Apr 3, 2026|Official source

Summary

Fifty percent of any extra earnings in an operating year may be used, on top of the required minimum annual return, to pay return on the outstanding investment. That use cannot make the total annual return more than 5 percent of the outstanding investment. The rest of the extra earnings must be applied, along with the required minimum annual repayment, to pay down the outstanding investment. If past operating years had income less than expenses, extra earnings must first be used to cover those past shortfalls (not counting any premium charges that were previously waived), and then to pay any premium charges that were waived earlier.

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 3, 2026

Release point: 119-73not60