12 U.S.C. § 1735c

General Insurance Fund

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(a) Establishment; purpose; mortgages or loans insurable; transfers toThere 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) Expenses chargeable to Fund

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.

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) Credits and charges to Fund

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) Restrictions on use of Fund

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 sections 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) Risk assessment

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.

(June 27, 1934, ch. 847, title V, § 519, as added Pub. L. 89–117, title II, § 214, Aug. 10, 1965, 79 Stat. 471; amended Pub. L. 90–19, § 1(a)(1), (3), May 25, 1967, 81 Stat. 17; Pub. L. 90–448, title I, § 104(c), Aug. 1, 1968, 82 Stat. 488; Pub. L. 91–609, title I, § 117(e), Dec. 31, 1970, 84 Stat. 1775; Pub. L. 94–375, § 10, Aug. 3, 1976, 90 Stat. 1073; Pub. L. 95–24, title I, § 102, Apr. 30, 1977, 91 Stat. 55; Pub. L. 95–557, title III, § 310, Oct. 31, 1978, 92 Stat. 2098; Pub. L. 96–153, title III, § 305, Dec. 21, 1979, 93 Stat. 1112; Pub. L. 96–399, title III, § 305, Oct. 8, 1980, 94 Stat. 1639; Pub. L. 97–35, title III, § 334, Aug. 13, 1981, 95 Stat. 414; Pub. L. 98–181, title I [title IV, § 403], Nov. 30, 1983, 97 Stat. 1208; Pub. L. 102–550, title I, § 185(c)(2), Oct. 28, 1992, 106 Stat. 3748; Pub. L. 103–233, title I, §§ 103(g)(2), 105(b), Apr. 11, 1994, 108 Stat. 362, 363; Pub. L. 110–289, div. B, title I, § 2118(c)(2), July 30, 2008, 122 Stat. 2835.)Editorial NotesReferences 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 sections 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 SubsidiariesEffective Date of 1981 Amendment

Amendment 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.

Notes of Decisions

Cited in 10 cases, 1977–2005 · leading case: Indus. Indem., Inc. v. Moon Landrieu, Sec'y of the Dep't of Hous. & Urban Dev. of the United States of Am., 615 F.2d 644 (5th Cir. 1980).

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Indus. Indem., Inc. v. Moon Landrieu, Sec'y of the Dep't of Hous. & Urban Dev. of the United States of Am., 615 F.2d 644 (5th Cir. 1980). · cites it 4× “12 U.S.C. § 1735c (1976). The “initial closing” of the Casa Claire apartment project occurred on March 16, 1971, and construction began and proceeded on schedule.”

The Lomas & Nettleton Co. v. Samuel R. Pierce, Jr., Sec'y, Dep't of Hous. & Urban Dev., 636 F.2d 971 (5th Cir. 1981). “12 U.S.C. § 1735c. Accordingly, we decided that the action was against the Secretary of HUD and not in reality against the United States since a judgment could be “paid out of money in the General Insurance fund that is a separate fund in the control and possession of the…”

Carlyle Gardens Co. v. Delaware State Hous. Auth., 659 F. Supp. 1300 (D. Del. 1987). “The fund at issue was the General Insurance Fund (“GIF”) established by 12 U.S.C. § 1735c (1980). The GIF is a revolving fund in the control of the Secretary used to finance HUD’s mortgage insurance program.”

Daniel E. Mann, Elizabeth Cannon & Lillian Rauh v. Samuel R. Pierce, Jr. & U.S. Dept. Of Hous. & Urban Dev., 803 F.2d 1552 (11th Cir. 1986). “12 U.S.C. § 1735c. To aid in its determination of whether the tenants’ claims could be paid from HUD’s General Insurance Fund, the district court requested affidavits detailing the operation of the fund.”

Monal Constr. Co. v. Brookside Ltd. P'ship, 539 F. Supp. 478 (W.D. Pa. 1982). “§ 1712 ; and the General Insurance Fund, 12 U.S.C. § 1735c. A review of the statutes creating those funds, establishes that each fund was created for a specific purpose and that the monies therein are not generally available for any debt of HUD.”

C.D. Barnes Assocs., Inc. v. Grand Haven Hideaway Ltd. P'ship, 406 F. Supp. 2d 801 (W.D. Mich. 2005). “See 12 U.S.C. § 1735c (d). Unlike some other HUD programs, the § 221(d)(4) program is available to private, for-profit mortgagors and is not restricted to low and moderate-income persons.”

Snyder v. Axelrod Mgmt. Co., 471 F. Supp. 308 (S.D.N.Y. 1979). “Insurance benefits are paid to the mortgagee out of the General Insurance Fund established by 12 U.S.C. § 1735c. To preserve the financial viability of and the federal government’s financial interest in section 220 projects, HUD is authorized to and did promulgate regulations to…”

Gramercy Spire Tenants' Ass'n v. Harris, 446 F. Supp. 814 (S.D.N.Y. 1977). “In the event of the mortgagor’s default, the Secretary must draw upon the reserves of the General Insurance Fund, established under § 519 of the NHA, 12 U.S.C. § 1735c, in order to meet HUD’s obligation to the mortgagee.”

Gramercy Spire Tenants'ass'n v. Harris, 446 F. Supp. 814 (S.D.N.Y. 1977). “In the event of the mortgagor's default, the Secretary must draw upon the reserves of the General Insurance Fund, established under § 519 of the NHA, 12 U.S.C. § 1735c, in order to meet HUD's obligation to the mortgagee.”

State Street Bank & Trust Co. v. United States, 228 Ct. Cl. 501 (Ct. Cl. 1981). · cites it 2× “The mortgage insurance provided by the National Housing Act is financed by the General Insurance Fund created by 12 U.S.C. § 1735c. This is a revolving mortgage insurance fund which was intended by Congress to be self-sustaining and actuarily sound.”

— 12 U.S.C. § 1735c(a) — 1 case

Indus. Indem., Inc. v. Moon Landrieu, Sec'y of the Dep't of Hous. & Urban Dev. of the United States of Am., 615 F.2d 644 (5th Cir. 1980). “12 U.S.C. § 1735c (1976). The “initial closing” of the Casa Claire apartment project occurred on March 16, 1971, and construction began and proceeded on schedule.”

— 12 U.S.C. § 1735c(b) — 1 case

— 12 U.S.C. § 1735c(c) — 1 case

State Street Bank & Trust Co. v. United States, 228 Ct. Cl. 501 (Ct. Cl. 1981). “The mortgage insurance provided by the National Housing Act is financed by the General Insurance Fund created by 12 U.S.C. § 1735c. This is a revolving mortgage insurance fund which was intended by Congress to be self-sustaining and actuarily sound.”

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