Public Law 119-73 (01/23/2026)

12 U.S.C. § 1716

Declaration of purposes of subchapter

The Congress declares that the purposes of this subchapter are to establish secondary market facilities for residential mortgages, to provide that the operations thereof shall be financed by private capital to the maximum extent feasible, and to authorize such facilities to—
(1)
provide stability in the secondary market for residential mortgages;
(2)
respond appropriately to the private capital market;
(3)
provide ongoing assistance to the secondary market for residential mortgages (including activities relating to mortgages on housing for low- and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities) by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgage financing;
(4)
promote access to mortgage credit throughout the Nation (including central cities, rural areas, and underserved areas) by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgage financing; and
(5)
manage and liquidate federally owned mortgage portfolios in an orderly manner, with a minimum of adverse effect upon the residential mortgage market and minimum loss to the Federal Government.

June 27, 1934, ch. 84748 Stat. 1252May 28, 1935, ch. 150, § 3049 Stat. 300Feb. 3, 1938, ch. 1352 Stat. 23June 3, 1939, ch. 17553 Stat. 808Mar. 28, 1941, ch. 31, § 555 Stat. 62July 1, 1948, ch. 784, § 162 Stat. 1206Aug. 10, 1948, ch. 83262 Stat. 1275Aug. 8, 1949, ch. 403, § 463 Stat. 576Oct. 25, 1949, ch. 729, § 763 Stat. 906Apr. 20, 1950, ch. 9464 Stat. 57Sept. 1, 1951, ch. 37865 Stat. 303Apr. 9, 1952, ch. 17366 Stat. 51July 14, 1952, ch. 72366 Stat. 602June 30, 1953, ch. 17067 Stat. 125June 29, 1954, ch. 410, § 1(1)68 Stat. 320Aug. 2, 1954, ch. 64968 Stat. 612Pub. L. 90–448, title VIII, § 802(b)82 Stat. 536Pub. L. 101–73, title VII, § 731(m)(1)103 Stat. 435Pub. L. 102–550, title XIII, § 1381(a)106 Stat. 3994(, title III, § 301, ; , ; , §§ 4, 5, ; , §§ 15, 16, ; , ; , ; , title II, §§ 201, 202, ; , ; , ; , title I, §§ 116, 122, , 59; , title II, § 205, title VI, § 608(b), , 315; , ; , §§ 3(a), 10(a)(2), , 603; , §§ 12, 13(a), ; , ; , title II, § 201, ; , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 102–550, § 1381(a)(1)1992—, substituted “residential” for “home” in introductory provisions.

Pub. L. 102–550, § 1381(a)(1)Par. (1). , substituted “residential” for “home”.

Pub. L. 102–550, § 1381(a)(1)Par. (3). , (2), substituted “residential” for “home” in two places, substituted “(including activities relating to mortgages on housing for low- and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities)” for “(including mortgages securing housing for low- and moderate-income families involving a reasonable economic return)”, and struck out “and” at end.

Pub. L. 102–550, § 1381(a)(3)Par. (4). , (4), added par. (4) and redesignated former par. (4) as (5).

Pub. L. 102–550, § 1381(a)(1)Par. (5). , (3), redesignated par. (4) as (5) and substituted “residential” for “home”.

Pub. L. 101–731989— added pars. (1) to (3), struck out subsecs. (a) and (b), and redesignated subsec. (c) as par. (4). Prior to amendment, subsecs. (a) and (b) related to supplementary assistance to the secondary market and to provision of special assistance, respectively.

Pub. L. 90–448section 1716b of this title1968— struck out provisions which established in the Federal Government a secondary market facility for home mortgages in view of which created two separate and distinct corporations.

section 1717 of this title1954—Act , amended section generally, substituting entirely new provisions for provisions now covered by and other sections in this subchapter.

Subsec. (a)(1)(G). Act , substituted in first sentence “” for “”.

1953—Subsec. (a)(1)(E). Act , § 12, in cl. (2), substituted “principal amount to be paid therefor” for “unpaid principal balance thereof”, and “aggregate principal amount” for “aggregate amount”; and substituted three provisos for former proviso which made such cl. (2) and any terms therein inapplicable to any defense or disaster mortgages as defined in subpar. (G) of par. (1).

Subsec. (a)(1)(G). Act , § 13(a), substituted in first sentence “” for “”.

1952—Subsec. (a)(1). Act , § 3(a)(1), authorized the FNMA to purchase Government-insured or guaranteed home mortgages other than defense or disaster mortgages if they are insured after .

Subsec. (a)(1)(E). Act , § 3(a)(2), (3), changed the base date from to , and exempted defense or disaster mortgages from the limitation of this subparagraph.

Subsec. (a)(1)(G). Act , § 3(a)(4), increased the FNMA commitment powers from $252,000,000 to $1,152,000,000 outstanding at any one time if the commitments relate to defense or disaster mortgages.

S.J. Res. , increased the $200,000,000 authorization to $252,000,000 and struck out , deadline, (1) with respect to programed defense housing for which applications were received prior to , and (2) with respect to subchapter VIII military housing if the commitment to insure the mortgage was issued after Dec. 27 and before .

Subsec. (c)(4). Act , inserted “Guam,” after “District of Columbia”.

1951—Subsec. (a)(1). Act , § 205, inserted reference to subchapter X of this chapter.

Subsec. (a)(1)(G). Act , § 608(b), inserted proviso.

1950—Act , § 122, substituted “Commissioner” for “Administrator” wherever appearing.

section 1706c of this titleSubsec. (a)(1). Act , § 116(1), (2), inserted “or ” and first proviso.

Subsec. (a)(1)(E). Act , § 116(3), substituted new proviso for former proviso.

Subsec. (a)(1)(F). Act , § 116(4), substituted provision that no loan made to finance the purchase price or construction cost of a dwelling was to be purchased by the Federal National Mortgage Association unless the Administrator of Veterans’ Affairs certifies that such dwelling conforms with minimum construction requirements prescribed by the Administrator for former provision that such certification was to be given by the mortgagee and that minimum construction standards were to be determined by the provisions within the National Housing Act.

Subsec. (a)(1)(G). Act , § 116(5), added par. (1)(G).

1949—Subsec. (a). Act , inserted reference to subchapter VIII in par. (1), and inserted proviso at end of par. (1)(E).

Subsec. (a)(1)(E). Joint Res. , struck out proviso and inserted new proviso.

1948—Act , amended section generally to create a Federal National Mortgage Association with power to purchase, service, or sell insured or guaranteed mortgage, provide for the powers and succession of the Association, and to eliminate the former national mortgage association.

Subsec. (a)(1). Act , §§ 201, 202, substituted “subchapter II or VI of this chapter” for “section 1709 or 1738 of this title”, inserted “after ”, after “or guaranteed”, and substituted “50” for “25” in cl. (2) of par. (1) (E).

1941—Subsec. (a)(2). Act , substituted “subchapters II and VI” for “subchapter II”.

1939—Subsec. (b). Act , amended last sentence.

Subsec. (c)(4). Act , inserted “Alaska, Hawaii or Puerto Rico”.

1938—Subsec. (a). Act , amended provisions generally, and among other changes, substituted “60 per centum” in subsec. (a)(3), for “80 per centum”.

ProvidedSubsec. (d). Act , substituted “$2,000,000” for “$5,000,000,” and “that at least 25 per centum thereof has been paid in cash,” for “paid in full in cash”, and inserted “or in first mortgages or such other first liens as are described in section 301 (a) hereof, which mortgages or liens shall be taken at such value as the Administrator may determine, not exceeding (except as to mortgages insured under title II of this Act) 60 per centum of the appraised value of the property as of the date of subscription, and that the remainder of the subscription to such capital stock is payable in the same manner and at such time as may be determined by the Administrator: , That no association shall issue notes, bonds, debentures, or other such obligations until such time as such subscriptions are paid in full in cash or Government securities at their par value or in mortgages or other liens as hereinbefore set forth”.

1935—Subsec. (d). Act , substituted “$5,000,000” for “$2,000,000”.

Statutory Notes and Related Subsidiaries

Effective Date of 1968 Amendment

Pub. L. 90–448section 808 of Pub. L. 90–448section 1716b of this titleFor effective date of amendment by title VIII of , see , set out as an Effective Date note under .

Effective Date of 1949 Amendment

Oct. 25, 1949, ch. 729, § 763 Stat. 906Joint Res. , , provided in part: “That the amendment made by this section 7 with respect to mortgages guaranteed under section 501 of the Servicemen’s Readjustment Act of 1944, as amended [this section], shall apply only to such mortgages guaranteed after the date of enactment of this Act [].”

Service or Sale of Mortgages Purchased Prior to ; Fulfillment of Prior Commitments

Act July 1, 1948, ch. 784, § 262 Stat. 1209

“Nothing in the amendment made by the first section of this Act [amending sections 1716, 1717 to 1721 of this title] shall limit the authority of the Federal National Mortgage Association to service or sell any mortgage purchased prior to the date of the enactment of this Act [], or to purchase, service, or sell any mortgage with respect to which a commitment to purchase was made prior to the date of the enactment of this Act [].”
, , provided that:

Executive Documents

Delegation of Functions

section 301 of Title 3Functions of President under this section delegated to Secretary of Housing and Urban Development, see Ex. Ord. No. 11732, , 38 F.R. 20429, set out as a note under , The President.