US Code

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

12 U.S.C. § 1715z–9

Co-insurance of eligible mortgage, advance, or loan

Section text and notes

(a)

Authority of Secretary; request of mortgagee; premium charges; provisions of contract of co-insurance; non-applicability of state insurance laws

In addition to providing insurance as otherwise authorized under this chapter, and notwithstanding any other provision of this chapter inconsistent with this section, the Secretary, upon request of any mortgagee and for such mortgage insurance premium as he may prescribe (which premium, or other charges to be paid by the mortgagor, shall not exceed the premium, or other charges, that would otherwise be applicable), may insure and make a commitment to insure under any provision of this subchapter any mortgage, advance, or loan otherwise eligible under such provision, pursuant to a co-insurance contract providing that the mortgagee will—
(1)
assume a percentage of any loss on the insured mortgage, advance, or loan in direct proportion to the amount of the co-insurance, which co-insurance shall not be less than 10 per centum, subject to any reasonable limit or limits on the liability of the mortgagee that may be specified in the event of unusual or catastrophic losses that may be incurred by any one mortgagee; and
(2)
carry out (under a delegation or otherwise and with or without compensation but subject to audit, exception, or review requirements) such credit approval, appraisal, inspection, commitment, property disposition, or other functions as the Secretary, pursuant to regulations, shall approve as consistent with the purposes of this chapter.
Any contract of co-insurance under this section shall contain such provisions relating to the sharing of premiums on a sound actuarial basis, establishment of mortgage reserves, manner of calculating insurance benefits, conditions with respect to foreclosure, handling and disposition of property prior to claim or settlement, rights of assignees (which may elect not to be subject to the loss sharing provisions), and other similar matters as the Secretary may prescribe pursuant to regulations. A mortgagee which enters into a contract of co-insurance under this section shall not by reason of such contract, or its adherence to such contract or applicable regulations of the Secretary, including provisions relating to the retention of risks in the event of sale or assignment of a mortgage, be made subject to any State law regulating the business of insurance.
(b)

Inspection of construction of dwellings or projects as prerequisite; minimum standards or criteria applicable

No insurance shall be granted pursuant to this section with respect to dwellings or projects approved for insurance prior to the beginning of construction unless the inspection of such construction is conducted in accordance with at least the minimum standards and criteria used with respect to dwellings or projects approved for mortgage insurance pursuant to other provisions of this subchapter.

(c)

Pub. L. 100–242, title IV, § 414(a)101 Stat. 1907 Repealed. , ,

(d)

Pub. L. 100–242, title IV, § 401(a)(3)101 Stat. 1898 Repealed. , ,

(e)

Availability unaffecting insurance otherwise authorized; criteria for exercise of authority by Secretary

The Secretary shall not withdraw, deny, or delay insurance otherwise authorized under any other provision of this chapter by reason of the availability of insurance pursuant to this section. The Secretary shall exercise his authority under this section only to the extent that he finds that the continued exercise of such authority will not adversely affect the flow of mortgage credit to older and declining neighborhoods and to the purchasers of older and lower cost housing.

(f)

Multifamily housing project; contract provisions; aggregate principal amount of all mortgages insured; loans on defaulted mortgages; insurance for state assisted projects and projects under construction; definitions; amount of reserves

(1)
Where the mortgage covers a multifamily housing proj­ect, the co-insurance contract may provide that the mortgagee assume (i) the full amount of any loss on the insured mortgage up to an amount equal to a fixed percentage of the outstanding principal balance of the mortgage at the time of claim for insurance benefits, or (ii) the full amount of any losses on insured mortgages in a portfolio of mortgages approved by the Secretary up to an amount equal to a fixed percentage of the outstanding principal balance of all mortgages in such portfolio at the time of claim for insurance benefits on a mortgage in the portfolio, plus a share of any loss in excess of the amount under clause (i) or (ii), whichever is applicable.
(2)
The Secretary may make loans, from the applicable insurance fund, to public housing agencies in connection with mortgages which have been insured pursuant to this subsection and which are in default.
(3)
section 1715z–1(b) of this title The Secretary may insure and make a commitment to insure in connection with a co-insurance contract pursuant to this subsection (A) a mortgage on a project assisted under the second proviso in the first sentence of , and (B) a mortgage or advance on a mortgage made to a public housing agency on a project under construction which is not approved for insurance prior to construction.
(4)
section 1437a(b)(6) of title 42 As used in this subsection, the term “public housing agency” has the meaning given such term in .
(5)
Notwithstanding any other provision of this chapter, the Secretary may include in the determination of replacement cost of a project to be covered by a mortgage made to a public housing agency and insured pursuant to this subsection, such reserves and development costs, not to exceed 5 per centum of the amount otherwise allowable, as may be established or authorized by the public housing agency consistent with such agency’s procedures and underwriting standards.
(g)

Redesignated (f)

(h)

Acceptable co-insurance provisions for rental rehabilitation; termination date

section 1715n(f) of this titleo1
1 See References in Text note below.
Notwithstanding any other provision of this section, in the case of a mortgage insured under secured by property which is to be rehabilitated or developed under section 1437  of title 42, such co-insurance may include provisions that—
(1)
insurance benefits shall equal the sum of (A) 90 per centum of the mortgage on the date of institution of foreclosure proceedings (or on the date of acquisition of the property otherwise after default), and (B) 90 per centum of interest arrears on the date benefits are paid;
(2)
the mortgagee shall remit to the Secretary, for credit to the General Insurance Fund, 90 per centum of any proceeds of the property, including sale proceeds, net of the mortgagee’s actual and reasonable costs related to the property and the enforcement of security;
(3)
payment of such benefits shall be made in cash unless the mortgagee submits a written request for debenture payment; and
(4)
the underwriter of co-insurance may reinsure 10 per centum of the mortgage amount with a private mortgage insurance company or with a State mortgage insurance agency.
(i)

2
2 So in original. Two subsecs. (i) have been enacted.
  Authority of mortgagee to assign its interest in any note or mortgage subject to a contract of co-insurance; terms and conditions respecting retention of co-insurance risk of such note or mortgage

Any mortgagee which enters into a contract of co-insurance under this section shall have the authority to assign its interest in any note or mortgage subject to a contract of co-insurance to a warehouse bank or other financial institution which provides interim funding for a loan co-insured under this section, and to retain the co-insurance risk of such note or mortgage, upon such terms and conditions as the Secretary shall prescribe.

(i)

2  Annual review of, and assessment of compliance with, requirements; report; adjustment of requirements

The Secretary shall, by January 15 and July 15 of each year (1) review the adequacy of capital and other requirements for mortgagees under this section, (2) assess the compliance by mortgagees with such requirements, and (3) make such adjustment to such requirements as the Secretary, after providing opportunity for hearing, determines to be appropriate to improve the long-term financial soundness of the Federal Housing Administration funds. Such requirements shall include the minimum capital or net worth of mortgagees; the ratio that mortgagees shall maintain between the mortgagee’s capital and the volume of mortgages co-insured by such mortgagee; and such other requirements as the Secretary determines to be appropriate to ensure the long-term financial soundness of the Federal Housing Administration funds. The Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives a report on the review and assessment under the previous sentence, and an explanation of the Secretary’s reasons for making any adjustment in requirements authorized under this section.

June 27, 1934, ch. 847 Pub. L. 93–383, title III, § 30788 Stat. 679 Pub. L. 94–375, § 690 Stat. 1070 Pub. L. 95–60, § 1(d)91 Stat. 257 Pub. L. 95–80, § 1(d)91 Stat. 339 Pub. L. 95–128, title III, § 301(f)91 Stat. 1131 Pub. L. 95–406, § 1(f)92 Stat. 879 Pub. L. 95–557, title III, § 301(f)92 Stat. 2096 Pub. L. 96–71, § 1(f)93 Stat. 501 Pub. L. 96–105, § 1(f)93 Stat. 794 Pub. L. 96–153, title III, § 301(f)93 Stat. 1111 Pub. L. 96–372, § 1(f)94 Stat. 1363 Pub. L. 96–399, title III, § 301(f)94 Stat. 1638 Pub. L. 96–470, title I, § 107(a)94 Stat. 2238 Pub. L. 97–35, title III, § 331(f)95 Stat. 413 Pub. L. 97–289, § 1(f)96 Stat. 1230 Pub. L. 98–35, § 1(f)97 Stat. 197 Pub. L. 98–109, § 1(f)97 Stat. 745 Pub. L. 98–181, title I97 Stat. 1206 Pub. L. 98–479, title I, § 104(a)(5)98 Stat. 2225 Pub. L. 99–120, § 1(e)99 Stat. 502 Pub. L. 99–156, § 1(e)99 Stat. 815 Pub. L. 99–219, § 1(e)99 Stat. 1730 Pub. L. 99–267, § 1(e)100 Stat. 73 Pub. L. 99–272, title III, § 3007(e)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. 100–242, title IV101 Stat. 1898 Pub. L. 101–235, title I, § 139(a)103 Stat. 2029 (, title II, § 244, as added , , ; amended , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; [title III, § 303(a), title IV, §§ 401(e), 434], , , 1207, 1222; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , , ; , §§ 401(a)(3), 414, 429(g), , , 1907, 1919; , , .)

Editorial Notes

References in Text

act June 27, 1934, ch. 847 48 Stat. 1246 This chapter, referred to in subsecs. (a), (e), and (f)(5), was in the original “this Act”, meaning , , which is classified principally to this chapter (§ 1701 et seq.). For complete classification of this Act to the Code, see Tables.

oPub. L. 101–625, title II, § 289(b)104 Stat. 4128 Section 1437 of title 42, referred to in subsec. (h), was repealed by , , .

Amendments

Pub. L. 101–2351989—Subsec. (i). added subsec. (i) relating to annual review of, and assessment of compliance with, requirements.

Pub. L. 100–242, § 414(a)1988—Subsec. (c). , struck out subsec. (c) which read as follows: “No insurance shall be granted pursuant to this section unless the Secretary has, after due consultation with the mortgage lending industry, determined that the demonstration program of co-insurance authorized by this section will not disrupt the mortgage market or reduce the availability of mortgage credit to borrowers who depend upon mortgage insurance provided under this chapter.”

Pub. L. 100–242, § 401(a)(3)Subsec. (d). , struck out subsec. (d) which read as follows: “No mortgage, advance, or loan shall be insured pursuant to this section after , except pursuant to a commitment to insure made before that date.”

Pub. L. 100–242, § 429(g)(1)Pub. L. 96–470, § 107(a)Subsec. (f). , which directed that subsec. (g) be amended by striking out par. (2) which read: “The second sentence of subsection (d) of this section shall not apply to mortgages made to public housing agencies, but for purposes of such second sentence such mortgages shall not be counted in the aggregate principal amount of all mortgages insured under this subchapter.”, and by redesignating former pars. (3) to (6) as (2) to (5), was executed to subsec. (f) to reflect the probable intent of Congress, because of the prior redesignation of subsec. (g) as (f) by .

Pub. L. 100–242Subsec. (h). , §§ 414(b)(1), 429(g)(2), made identical amendments, substituting “co-insurance” for “coinsurance” in introductory provision and par. (4).

Pub. L. 100–242, § 401(a)(3), struck out at end “No commitment for insurance pursuant to this subsection may be issued after .”

Pub. L. 100–242, § 414(b)(2)Subsec. (i). , added subsec. (i).

Pub. L. 100–2001987—Subsecs. (d), (h). 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—Subsecs. (d), (h). 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. 99–219, § 1(e)(1)1985—Subsec. (d). , substituted “” for “”.

Pub. L. 99–156, § 1(e)(1), substituted “” for “”.

Pub. L. 99–120, § 1(e)(1), substituted “” for “”.

Pub. L. 99–219, § 1(e)(2)Subsec. (h). , substituted “after ” for “on or after ”.

Pub. L. 99–156, § 1(e)(2), substituted “” for “”.

Pub. L. 99–120, § 1(e)(2), substituted “” for “”.

Pub. L. 98–4791984—Subsec. (d). amended subsec. (d) generally, thereby striking out last sentence which provided: “The aggregate principal amount of mortgages and loans insured pursuant to this section in any fiscal year beginning on or after , and ending prior to , shall not exceed 20 per centum of the aggregate principal amount of all mortgages and loans insured under this subchapter during such fiscal year.”

Pub. L. 98–181, § 401(e)(3)section 401(e)(2) of Pub. L. 98–1811983—Subsec. (d). , which directed that last two sentences of subsec. (d) be struck out was executed by striking out last sentence which provided that the overall percentage limitation specified in the preceding sentence also apply separately within each of the categories of mortgages and loans covering one- to four-family dwellings and mortgages and loans covering projects with five or more dwelling units, as the probable intent of Congress, in view of the amendment to the next to last sentence by .

Pub. L. 98–181, § 401(e)(1), (2), substituted “” for “” and “” for “”.

Pub. L. 98–109 substituted “” for “” and “” for “”.

Pub. L. 98–35 substituted “” for “” and “” for “”.

Pub. L. 98–181, § 434(1)Pub. L. 96–470Subsec. (f)(1). , struck out “the mortgagee is a public housing agency or an insured depository institution and” after “Where”. Notwithstanding the directory language that amendment be made to subsec. (g)(1), the amendment was executed to subsec. (f)(1) to reflect the probable intent of Congress and the intervening redesignation of subsec. (g) as (f) by .

Pub. L. 98–181, § 434(2)section 1437a(b)(6) of title 42section 1437a(6) of title 42Pub. L. 96–470Subsec. (f)(5). , substituted reference to for reference to and struck out provision which defined the term “insured depository institution” as any savings bank, savings and loan association, commercial bank or other such depository institution whose deposits are insured by the Federal Deposit Insurance Corporation, by the Federal Savings and Loan Insurance Corporation, or by an agency or instrumentality of a State. Notwithstanding the directory language that amendment be made to subsec. (g)(5), the amendment was executed to subsec. (f)(5) to reflect the probable intent of Congress and the intervening redesignation of subsec. (g) as (f) by .

Pub. L. 98–181, § 303(a)Subsec. (h). , added subsec. (h).

Pub. L. 97–2891982—Subsec. (d). substituted “” and “” for “” and “”, respectively.

Pub. L. 97–351981—Subsec. (d). substituted “1982” for “1981” in two places.

Pub. L. 96–3991980—Subsec. (d). substituted “” and “” for “” and “”, respectively.

Pub. L. 96–372 substituted “” and “” for “” and “”, respectively.

Pub. L. 96–470Subsecs. (f), (g). struck out subsec. (f) and redesignated subsec. (g) as (f).

Pub. L. 96–1531979—Subsec. (d). substituted “” for “” and “” for “”.

Pub. L. 96–105 substituted “” and “” for “” and “”, respectively.

Pub. L. 96–71 substituted “” and “” for “” and “”, respectively.

Pub. L. 95–5571978—Subsec. (d). substituted “” for “” and “” for “”.

Pub. L. 95–406 substituted “” for “” and “” for “”.

Pub. L. 95–1281977—Subsec. (d). substituted “” for “” and “” for “”.

Pub. L. 95–80 substituted “” for “”.

Pub. L. 95–60 substituted “” for “”.

Pub. L. 94–375, § 6(b)1976—Subsec. (a). , inserted, in text following par. (2), a provision excluding a mortgagee which enters into a contract under this section from regulation by state insurance laws.

Pub. L. 94–375, § 6(a)Subsec. (g). , added subsec. (g).

Statutory Notes and Related Subsidiaries

Change of Name

section 1(a) of Pub. L. 104–14section 21 of Title 2Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by , set out as a note preceding , The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, .

Effective Date of 1981 Amendment

Pub. L. 97–35section 371 of Pub. L. 97–35section 3701 of this titleAmendment by effective , see , set out as an Effective Date note under .