US Code

Public Law 119-102 (07/12/2026)

12 U.S.C. § 1715z–14

Risk-sharing demonstration

Section text and notes

(a)

Demonstration mortgage risk-sharing program; areas; number of mortgages

The purpose of this section is to authorize a demonstration mortgage risk-sharing program designed to test the feasibility of entering into risk-sharing contracts with private mortgage insurers and with insured community development financial institutions in order to reduce Government risk and administrative costs, and to speed mortgage processing. The Secretary shall limit the demonstration under this section to not more than four administrative regions of the Department of Housing and Urban Development, and shall assure that the program is in the financial interest of the Government and will not result in loss of employment by any employees of the Department of Housing and Urban Development before the expiration of the 5-year period beginning on . The aggregate number of mortgages for which risk of nonpayment is shared under this section in any administrative region of the Department of Housing and Urban Development in any fiscal year may not exceed 20 percent of the aggregate number of mortgages and loans insured by the Secretary under this subchapter in such region during the preceding fiscal year.

(b)

One- to four-family dwellings; requirements for private mortgage insurance companies

1
1 See References in Text note below.
section 1717(b)(2)(C) of this titleNotwithstanding any other provision of this chapter inconsistent with this section, the Secretary is authorized, in providing mortgage insurance with respect to one- to four-family dwellings under sections 1709(b), 1715y, and 1715z–10  of this title, to enter into risk-sharing contracts with private mortgage insurance companies which have been determined to be qualified insurers under and with insured community development financial institutions. Such contracts shall require private mortgage insurance companies and insured community development financial institutions to—
(1)
2
2 So in original. Probably should be followed by “and”.
assume a secondary percentage of loss on any mortgage insured pursuant to section 1709(b), 1715y, or 1715z–10 of this title covering a one- to four-family dwelling, which percentage of loss shall be set forth in the risk-sharing contract, with the first percentage of loss to be borne by the Secretary; 
(2)
perform or delegate underwriting, credit approval, appraisal, inspection, commitment, claims processing, property disposition, or other functions as the Secretary shall approve as consistent with the purposes of this section and shall set forth in the risk-sharing contract.
(c)

Required contract provisions

Any contract for risk-sharing under this section shall contain such provisions relating to the sharing of premiums received by the Secretary with a private mortgage insurer or insured community development financial institution on a sound actuarial basis, establishment of loss reserves, manner of calculating claims on such risk-sharing contract, conditions with respect to foreclosure, handling and disposition of property prior to claim or settlement, rights of assignees, and other similar matters as the Secretary may prescribe pursuant to regulations. Pursuant to a contract under this section, a private mortgage insurance company or insured community development financial institution shall endorse loans for risk-sharing and take such other actions on behalf of the Secretary and in the Secretary’s name as the Secretary may authorize.

(d)

Mortgages offered for inclusion by Secretary

The Secretary shall require any private mortgage insurance company or insured community development financial institution participating in the program under this section to provide risk-sharing for those mortgages offered by the Secretary for inclusion in the program.

(e)

Insured community development financial institution

section 4702 of this titlesection 1813 of this titlesection 1752 of this titleFor purposes of this section, the term “insured community development financial institution” means a community development financial institution, as such term is defined in that is an insured depository institution (as such term is defined in ) or an insured credit union (as such term is defined in ).

June 27, 1934, ch. 847 Pub. L. 98–181, title I97 Stat. 1219 Pub. L. 99–120, § 1(g)99 Stat. 502 Pub. L. 99–156, § 1(g)99 Stat. 815 Pub. L. 99–219, § 1(g)99 Stat. 1730 Pub. L. 99–267, § 1(g)100 Stat. 73 Pub. L. 99–272, title III, § 3007(g)100 Stat. 105 Pub. L. 99–289, § 1(b)100 Stat. 412 Pub. L. 99–345, § 1100 Stat. 673 Pub. L. 99–430100 Stat. 986 Pub. L. 100–122, § 1101 Stat. 793 Pub. L. 100–154101 Stat. 890 Pub. L. 100–170101 Stat. 914 Pub. L. 100–179101 Stat. 1018 Pub. L. 100–200101 Stat. 1327 Pub. L. 106–554, § 1(a)(7) [title I, § 143]114 Stat. 2763 (, title II, § 249, as added [title IV, § 428(a)], , ; amended , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , , 2763A–618.)

Editorial Notes

References in Text

Section 1715z–10 of this titlePub. L. 110–289, div. B, title I, § 2120(a)(7)122 Stat. 2835 , referred to in subsec. (b), was repealed by , , .

Amendments

Pub. L. 106–554, § 1(a)(7) [title I, § 143(1)]2000—, substituted “Risk-sharing demonstration” for “Reinsurance contracts” in section catchline.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(2), (3)]Subsec. (a). , in heading and first sentence substituted “risk-sharing” for “reinsurance” wherever appearing, in first sentence inserted “and with insured community development financial institutions” after “private mortgage insurers”, in second sentence substituted “four administrative regions” for “two administrative regions” and “the expiration of the 5-year period beginning on ” for “”, and in last sentence substituted “mortgages for which risk of nonpayment is shared” for “mortgages insured” and “20 percent” for “10 percent”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(2), (4)(A), (B)]Subsec. (b). , in first sentence of introductory provisions, substituted “, in providing” for “to provide”, “, to enter into” for “through” and “risk-sharing” for “reinsurance” and inserted “and with insured community development financial institutions” before period at end and, in second sentence of introductory provisions, inserted “and insured community development financial institutions” after “private mortgage insurance companies”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(4)(C)]Subsec. (b)(1). , added par. (1) and struck out former par. (1) which read as follows: “assume a percentage of loss on any mortgage insured pursuant to section 1709(b), 1715y, or 1715z–10 of this title covering a one- to four-family dwelling, which percentage of loss shall be set forth in the risk-sharing contract; and”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(2)], substituted “risk-sharing” for “reinsurance”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(4)(D)]Subsec. (b)(2). , substituted “perform or delegate underwriting,” for “carry out (under appropriate delegation) such” and “functions as the Secretary” for “function as the Secretary pursuant to regulations,” and inserted before period at end “and shall set forth in the risk-sharing contract”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(2), (5)]Subsec. (c). , in first sentence, substituted “contract for” for “contract of” and “risk-sharing” for “reinsurance”, inserted “received by the Secretary with a private mortgage insurer or insured community development financial institution” after “sharing of premiums”, substituted “loss reserves” for “insurance reserves”, “such risk-sharing contract” for “such insurance”, and “rights of assignees” for “right of assignees” and, in second sentence, inserted “or insured community development financial institution” after “private mortgage insurance company” and substituted “loans for risk-sharing” for “loans for insurance”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(2), (6)]Subsec. (d). , inserted “or insured community development financial institution” after “private mortgage insurance company” and substituted “risk-sharing” for “reinsurance”.

Pub. L. 106–554, § 1(a)(7) [title I, § 143(7)]Subsec. (e). , added subsec. (e).

Pub. L. 100–2001987—Subsec. (a). substituted “” for “”.

Pub. L. 100–179 substituted “” for “”.

Pub. L. 100–170 substituted “” for “”.

Pub. L. 100–154 substituted “” for “”.

Pub. L. 100–122 substituted “” for “”.

Pub. L. 99–4301986—Subsec. (a). substituted “” for “”.

Pub. L. 99–345 substituted “” for “”.

Pub. L. 99–289 substituted “” for “”.

Pub. L. 99–272Pub. L. 99–219 made amendment identical to . See 1985 Amendment note below.

Pub. L. 99–267 substituted “” for “”.

Pub. L. 99–2191985—Subsec. (a). substituted “” for “”.

Pub. L. 99–156 substituted “” for “”.

Pub. L. 99–120 substituted “” for “”.

Statutory Notes and Related Subsidiaries

Evaluation of Reinsurance Program; Report to Congress

Pub. L. 98–181, title I97 Stat. 1219

“The Secretary of Housing and Urban Development shall evaluate the reinsurance program under section 249 of the National Housing Act [this section] and, not later than , submit to the Congress a report setting forth the results of such evaluation. Such report shall include an evaluation of the possible effect of a reinsurance program on the characteristics of the pool of mortgages remaining wholly under the applicable insurance funds and the actuarial soundness of such funds under such conditions.”
[title IV, § 428(b)], , , provided that: