12 U.S.C. § 1711 — General Surplus and Participating Re-

Page 570 TITLE 12—BANKS AND BANKING § 1711 sections 1713, 1748b, and 1750c of this title] shall not apply in any case where the mortgage involved was in- sured or the commitment for such insurance was issued prior to the effective date of the Housing Act of 1954 [Aug. 2, 1954].’’ REGULATIONS Pub. L. 104–134, title I, § 101(e) [title II, § 221(c)(1)], Apr. 26, 1996, 110 Stat. 1321–291, provided that: ‘‘Not later than 30 days after the date of enactment of this Act [Apr. 26, 1996], the Secretary of Housing and Urban Development shall issue interim regulations to imple- ment section 407 of the Balanced Budget Downpayment Act, I [Pub. L. 104–99, amending this section and sec- tion 1715u of this title and enacting provisions set out as a note above], and the amendments to the National Housing Act made by that section.’’ Pub. L. 104–99, title IV, § 407(d), Jan. 26, 1996, 110 Stat. 46, which directed the Secretary of Housing and Urban Development to issue interim regulations to implement section 407 of Pub. L. 104–99 and amendments made by that section (amending this section and section 1715u of this title and enacting provisions set out as a note above) not later than 60 days after Jan. 26, 1996, was re- pealed by Pub. L. 104–134, title I, § 101(e) [title II, § 221(c)(2)], Apr. 26, 1996, 110 Stat. 1321–257, 1321–291; re- numbered title I, Pub. L. 104–140, § 1(a), May 2, 1996, 110 Stat. 1327. Pub. L. 100–628, title X, § 1064(c), Nov. 7, 1988, 102 Stat. 3275, provided that: ‘‘In developing regulations to carry out the amendments made by this section [amending this section], the Secretary of Housing and Urban De- velopment may delegate to mortgagees the authority to make determinations on behalf of the Secretary, and the Secretary shall rely on certifications and post audit reviews to the greatest extent possible.’’ HOMEOWNERSHIP PRESERVATION Pub. L. 110–289, div. B, title I, § 2125, July 30, 2008, 122 Stat. 2840, provided that: ‘‘The Secretary of Housing and Urban Development and the Commissioner of the Federal Housing Administration, in consultation with industry, the Neighborhood Reinvestment Corporation, and other entities involved in foreclosure prevention activities, shall— ‘‘(1) develop and implement a plan to improve the Federal Housing Administration’s loss mitigation process; and ‘‘(2) report such plan to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.’’ ASSET CONTROL AREA DEMONSTRATION PROGRAM AGREEMENTS, CONTRACTS, AND REGULATIONS Pub. L. 107–206, title I, § 1303, Aug. 2, 2002, 116 Stat. 897, provided that: ‘‘The Secretary of Housing and Urban Development shall begin to enter into new agreements and contracts pursuant to the Asset Con- trol Area Demonstration Program as provided in sec- tion 602 of Public Law 105–276 [amending this section] not later than September 15, 2002: Provided, That any agreement or contract entered into pursuant to such program shall be consistent with the requirements of such section 602: Provided further, That the Department shall develop proposed regulations for this program not later than September 15, 2002.’’ TRANSFER OF HUD ASSETS IN REVITALIZATION AREAS Pub. L. 106–554, § 1(a)(7) [title I, § 142], Dec. 21, 2000, 114 Stat. 2763, 2763A–618, provided that: ‘‘In carrying out the program under section 204(h) of the National Hous- ing Act (12 U.S.C. 1710(h)), upon the request of the chief executive officer of a county or the government of ap- propriate jurisdiction and not later than 60 days after such request is made, the Secretary of Housing and Urban Development shall designate as a revitalization area all portions of such county that meet the criteria for such designation under paragraph (3) of such sec- tion.’’ SETTLEMENT COSTS IN THE FINANCING OF FEDERAL HOUSING ADMINISTRATION AND VETERANS’ ADMINIS- TRATION ASSISTED HOUSING; STUDY AND REC- OMMENDATIONS TO CONGRESS ON REDUCTION AND STANDARDIZATION OF COSTS Pub. L. 91–351, title VII, § 701, July 24, 1970, 84 Stat. 461, provided that: ‘‘(a) With respect to housing built, rehabilitated, or sold with assistance provided under the National Hous- ing Act [this chapter] or under chapter 37 of title 38, United States Code, the Secretary of Housing and Urban Development and the Administrator of Veterans’ Affairs are respectively authorized and directed to pre- scribe standards governing the amounts of settlement costs allowable in connection with the financing of such housing in any such area. Such standards shall— ‘‘(1) be established after consultation between the Secretary and the Administrator; ‘‘(2) be consistent in any area for housing assisted under the National Housing Act and housing assisted under chapter 37 of title 38, United States Code; and ‘‘(3) be based on the Secretary’s and the Adminis- trator’s estimates of the reasonable charge for nec- essary services involved in settlements for particular classes of mortgages and loans. ‘‘(b) The Secretary and the Administrator shall un- dertake a joint study and make recommendations to the Congress not later than one year after the date of enactment of this Act [July 24, 1970] with respect to legislative and administrative actions which should be taken to reduce mortgage settlement costs and to standardize these costs for all geographic areas.’’ § 1711. General Surplus and Participating Re- serve Accounts (a) Establishment; abolishment of General Rein- surance Account The Secretary shall establish as of July 1, 1954, in the Mutual Mortgage Insurance Fund a Gen- eral Surplus Account and a Participating Re- serve Account. All of the assets of the General Reinsurance Account shall be transferred to the General Surplus Account whereupon the General Reinsurance Account shall be abolished. There shall be transferred from the various group ac- counts to the Participating Reserve Account as of July 1, 1954, an amount equal to the aggregate amount which would have been distributed under the provisions of this section in effect on June 30, 1954, if all outstanding mortgages in such group accounts had been paid in full on said date. All of the remaining balances of said group accounts shall as of said date be trans- ferred to the General Surplus Account where- upon all of said group accounts shall be abol- ished. (b) Credits and charges The aggregate net income thereafter received or any net loss thereafter sustained by the Mu- tual Mortgage Insurance Fund in any semi- annual period shall be credited or charged to the General Surplus Account and/or the Partici- pating Reserve Account in such manner and amounts as the Secretary may determine to be in accord with sound actuarial and accounting practice. (c) Distribution of funds to terminating mortga- gors Upon termination of the insurance obligation of the Mutual Mortgage Insurance Fund by pay- Page 571 TITLE 12—BANKS AND BANKING § 1711 ment of any mortgage insured thereunder, the Secretary is authorized to distribute to the mortgagor a share of the Participating Reserve Account in such manner and amount as the Sec- retary shall determine to be equitable and in ac- cordance with sound actuarial and accounting practice: Provided, That, in no event, shall any such distributable share exceed the aggregate scheduled annual premiums of the mortgagor to the year of termination of the insurance. The Secretary shall not distribute any share to an eligible mortgagor under this subsection begin- ning on the date which is 6 years after the date the Secretary first transmitted written notifica- tion of eligibility to the last known address of the mortgagor, unless the mortgagor has applied in accordance with procedures prescribed by the Secretary for payment of the share within the 6- year period. The Secretary shall transfer any amounts no longer eligible for distribution under the previous sentence from the Partici- pating Reserve Account to the General Surplus Account. (d) Rights and liabilities No mortgagor or mortgagee of any mortgage insured under section 1709 of this title shall have any vested right in a credit balance in any such account or be subject to any liability arising out of the mutuality of the Fund and the determina- tion of the Secretary as to the amount to be paid by him to any mortgagor shall be final and conclusive. (e) Actuarial status of entire Fund In determining whether there is a surplus for distribution to mortgagors under this section, the Secretary shall take into account the actu- arial status of the entire Fund. (f) Capital ratio for Mutual Mortgage Insurance Fund (1) The Secretary shall ensure that the Mutual Mortgage Insurance Fund attains a capital ratio of not less than 1.25 percent within 24 months after November 5, 1990, and maintains such ratio thereafter, subject to paragraph (2). (2) The Secretary shall endeavor to ensure that the Mutual Mortgage Insurance Fund at- tains a capital ratio of not less than 2.0 percent within 10 years after November 5, 1990, and shall ensure that the Fund maintains at least such capital ratio at all times thereafter. (3) Upon the expiration of the 24-month period beginning on November 5, 1990, the Secretary shall submit to the Congress a report describing the actions the Secretary will take to ensure that the Mutual Mortgage Insurance Fund at- tains the capital ratio required under paragraph (2). (4) For purposes of this subsection: (A) The term ‘‘capital’’ means the economic net worth of the Mutual Mortgage Insurance Fund, as determined by the Secretary under the annual audit required under section 1735f–16 of this title. (B) The term ‘‘capital ratio’’ means the ratio of capital to unamortized insurance-in-force. (C) The term ‘‘economic net worth’’ means the current cash available to the Fund, plus the net present value of all future cash inflows and outflows expected to result from the out- standing mortgages in the Fund. (D) The term ‘‘unamortized insurance-in- force’’ means the remaining obligation on out- standing mortgages which are obligations of the Mutual Mortgage Insurance Fund, as esti- mated by the Secretary. (June 27, 1934, ch. 847, title II, § 205, 48 Stat. 1250; May 28, 1935, ch. 150, § 29(b), 49 Stat. 300; Feb. 3, 1938, ch. 13, § 3, 52 Stat. 15; June 3, 1939, ch. 175, § 11, 53 Stat. 807; Apr. 20, 1950, ch. 94, title I, § 122, 64 Stat. 59; June 30, 1953, ch. 170, § 4, 67 Stat. 122; Aug. 2, 1954, ch. 649, title I, § 114, 68 Stat. 594; Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 101–508, title II, §§ 2104, 2105, Nov. 5, 1990, 104 Stat. 1388–19; Pub. L. 102–550, title V, § 508(a), Oct. 28, 1992, 106 Stat. 3782; Pub. L. 110–289, div. B, title I, § 2118(c)(1), July 30, 2008, 122 Stat. 2835.) Editorial Notes AMENDMENTS 2008—Subsecs. (g), (h). Pub. L. 110–289 struck out sub- secs. (g) and (h) which related to annual independent audit of Mutual Mortgage Insurance Fund and adjust- ment of premiums, respectively. 1992—Subsec. (c). Pub. L. 102–550 inserted at end ‘‘The Secretary shall not distribute any share to an eligible mortgagor under this subsection beginning on the date which is 6 years after the date the Secretary first transmitted written notification of eligibility to the last known address of the mortgagor, unless the mort- gagor has applied in accordance with procedures pre- scribed by the Secretary for payment of the share with- in the 6-year period. The Secretary shall transfer any amounts no longer eligible for distribution under the previous sentence from the Participating Reserve Ac- count to the General Surplus Account.’’ 1990—Subsec. (e). Pub. L. 101–508, § 2104, added subsec. (e). Subsecs. (f) to (h). Pub. L. 101–508, § 2105, added sub- secs. (f) to (h). 1967—Pub. L. 90–19 substituted ‘‘Secretary’’ for ‘‘Com- missioner’’ wherever appearing in subsecs. (a) to (d) of this section. 1954—Act Aug. 2, 1954, amended section generally to eliminate the former group accounts and substitute therefor a general surplus account and participating re- serve account. 1953—Subsec. (c). Act June 30, 1953, inserted sentence relating to semi-annual transfer of group accounts, and, in remainder of section, changed the provisions re- lating to settlement of accounts. 1950—Act Apr. 20, 1950, substituted ‘‘Commissioner’’ for ‘‘Administrator’’ wherever appearing. 1939—Subsec. (b). Act June 3, 1939, inserted ‘‘prior to July 1, 1939’’. 1938—Subsecs. (a) to (f). Act Feb. 3, 1938, amended provisions generally, and among other changes, struck out subsec. (f). 1935—Subsec. (f). Act May 28, 1935, substituted ‘‘an- nual premium charge’’ for ‘‘premium charge’’ in first sentence. Statutory Notes and Related Subsidiaries EXCEPTION TO STATUTE OF LIMITATIONS Pub. L. 102–550, title V, § 508(b), Oct. 28, 1992, 106 Stat. 3782, provided that: ‘‘Notwithstanding the 6-year limi- tation on distribution of shares of the Participating Reserve Account under section 205(c) of the National Housing Act [12 U.S.C. 1711(c)], the Secretary shall dis- tribute a share to an otherwise eligible mortgagor in accordance with section 205(c), if the mortgagor applies for payment of the share within 1 year after the date of enactment of this Act [Oct. 28, 1992] in accordance with procedures in effect on such date.’’ Page 572 TITLE 12—BANKS AND BANKING § 1712 § 1712. Investment of funds Moneys in the Fund not needed for the current operations of the Department of Housing and Urban Development related to insurance under section 1709 of this title shall be deposited with the Treasurer of the United States to the credit of the Fund, or invested in bonds or other obli- gations of, or in bonds or other obligations guar- anteed 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, pur- chase in the open market debentures issued under the provisions of section 1710 of this title. Such purchases shall be made at a price which will provide an investment yield of not less than the yield obtainable from other investments au- thorized by this section. Debentures so pur- chased shall be canceled and not reissued, and the several group accounts to which such deben- tures have been charged shall be charged with the amounts used in making such purchases. (June 27, 1934, ch. 847, title II, § 206, 48 Stat. 1252; Feb. 3, 1938, ch. 13, § 3, 52 Stat. 16; Apr. 20, 1950, ch. 94, title I, § 122, 64 Stat. 59; Pub. L. 90–19, § 1(a)(1), (3), (e), May 25, 1967, 81 Stat. 17, 18; Pub. L. 91–609, title I, § 117(a), Dec. 31, 1970, 84 Stat. 1774.) Editorial Notes AMENDMENTS 1970—Pub. L. 91–609 provided for guarantee as to prin- cipal and interest by any agency of the United States and for investment of monies in bonds or other obliga- tions the proceeds of which will be used to directly sup- port the residential mortgage market. 1967—Pub. L. 90–19 substituted ‘‘Department of Hous- ing and Urban Development’’ and ‘‘Secretary’’ for ‘‘Federal Housing Administration’’ and ‘‘Commis- sioner’’, respectively, and inserted ‘‘related to insur- ance under section 1709 of this title’’ before ‘‘shall be deposited’’. 1950—Act Apr. 20, 1950, substituted ‘‘Commissioner’’ for ‘‘Administrator’’. 1938—Act Feb. 3, 1938, among other changes, inserted ‘‘or in bonds or other obligations guaranteed as to prin- cipal and interest by’’ in first sentence, and inserted third sentence. § 1712a. Indexing of FHA multifamily housing loan limits (a) Method of indexing The dollar amounts set forth in— (1) section 1713(c)(3)(A) of this title; (2) section 1715e(b)(2)(A) of this title; (3) section 1715k(d)(3)(B)(iii)(I) of this title; (4) section 1715l(d)(3)(ii)(I) of this title; (5) section 1715l(d)(4)(ii)(I) of this title; (6) section 1715v(c)(2)(A) of this title; and (7) section 1715y(e)(3)(A) of this title; (collectively hereinafter referred to as the ‘‘Dol- lar Amounts’’) shall be adjusted annually (com- mencing in 2004) on the effective date of the Fed- eral Reserve Board’s adjustment of the $400 fig- ure in the Home Ownership and Equity Protec- tion Act of 1994 (HOEPA). The adjustment of the Dollar Amounts shall be calculated using the percentage change in the Consumer Price Index for All Urban Consumers (CPI–U) as applied by the Federal Reserve Board for purposes of the above-described HOEPA adjustment. (b) Notification The Federal Reserve Board on a timely basis shall notify the Secretary, or his designee, in writing of the adjustment described in sub- section (a) and of the effective date of such ad- justment in order to permit the Secretary to un- dertake publication in the Federal Register of corresponding adjustments to the Dollar Amounts. The dollar amount of any adjustment shall be rounded to the next lower dollar. (June 27, 1934, ch. 847, title II, § 206A, as added Pub. L. 107–326, § 5(a), Dec. 4, 2002, 116 Stat. 2794.) Editorial Notes REFERENCES IN TEXT The Home Ownership and Equity Protection Act of 1994, referred to in subsec. (a), is subtitle B (§§ 151–158) of title I of Pub. L. 103–325, Sept. 23, 1994, 108 Stat. 2190, which enacted sections 1639 and 1648 of Title 15, Com- merce and Trade, amended sections 1602, 1604, 1610, 1640, 1641, and 1647 of Title 15, and enacted provisions set out as notes under sections 1601 and 1602 of Title 15. For complete classification of this Act to the Code, see Short Title of 1994 Amendment note set out under sec- tion 1601 of Title 15 and Tables. § 1713. Rental housing insurance (a) Definitions As used in this section— (1) The term ‘‘mortgage’’ means a first mort- gage on real estate in fee simple, or on the in- terest of either the lessor or lessee thereof (A) under a lease for not less than ninety-nine years which is renewable or (B) under a lease having a period of not less than fifty years to run from the date the mortgage was executed, upon which there is located or upon which there is to be constructed a building or build- ings designed principally for residential use, or upon which there is located or to be con- structed facilities for manufactured homes, and the term ‘‘first mortgage’’ means such classes of first liens as are commonly given to secure advances (including but not being lim- ited to advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State, in which the real estate is located, together with the credit instrument or instruments, if any, secured thereby, and may be in the form of trust mortgages or mortgage indentures or deeds of trust securing notes, bonds, or other credit instruments. (2) The term ‘‘mortgagee’’ means the origi- nal lender under a mortgage, and its succes- sors and assigns, and includes the holders of credit instruments issued under a trust mort- gage or deed of trust pursuant to which such holders act by and through a trustee therein named. (3) The term ‘‘mortgagor’’ means the origi- nal borrower under a mortgage and its succes- sors and assigns. (4) The term ‘‘maturity date’’ means the date on which the mortgage indebtedness