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. (1) provide stability in the secondary market for residential mortgages;
2. (2) respond appropriately to the private capital market;
3. (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. (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. (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. 847, title III, § 301, 48 Stat. 1252; May 28, 1935, ch. 150, § 30, 49 Stat. 300; Feb. 3, 1938, ch. 13, §§ 4, 5, 52 Stat. 23; June 3, 1939, ch. 175, §§ 15, 16, 53 Stat. 808; Mar. 28, 1941, ch. 31, § 5, 55 Stat. 62; July 1, 1948, ch. 784, § 1, 62 Stat. 1206; Aug. 10, 1948, ch. 832, title II, §§ 201, 202, 62 Stat. 1275; Aug. 8, 1949, ch. 403, § 4, 63 Stat. 576; Oct. 25, 1949, ch. 729, § 7, 63 Stat. 906; Apr. 20, 1950, ch. 94, title I, §§ 116, 122, 64 Stat. 57, 59; Sept. 1, 1951, ch. 378, title II, § 205, title VI, § 608(b), 65 Stat. 303, 315; Apr. 9, 1952, ch. 173, 66 Stat. 51; July 14, 1952, ch. 723, §§ 3(a), 10(a)(2), 66 Stat. 602, 603; June 30, 1953, ch. 170, §§ 12, 13(a), 67 Stat. 125; June 29, 1954, ch. 410, § 1(1), 68 Stat. 320; Aug. 2, 1954, ch. 649, title II, § 201, 68 Stat. 612; Pub. L. 90–448, title VIII, § 802(b), Aug. 1, 1968, 82 Stat. 536; Pub. L. 101–73, title VII, § 731(m)(1), Aug. 9, 1989, 103 Stat. 435; Pub. L. 102–550, title XIII, § 1381(a), Oct. 28, 1992, 106 Stat. 3994.)

Editorial Notes

Amendments

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

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

Par. (3). Pub. L. 102–550, § 1381(a)(1), (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.

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

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

1989—Pub. L. 101–73 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.

1968—Pub. L. 90–448 struck out provisions which established in the Federal Government a secondary market facility for home mortgages in view of section 1716b of this title which created two separate and distinct corporations.

1954—Act Aug. 2, 1954, amended section generally, substituting entirely new provisions for provisions now covered by section 1717 of this title and other sections in this subchapter.

Subsec. (a)(1)(G). Act June 29, 1954, substituted in first sentence “August 1, 1954” for “July 1, 1954”.

1953—Subsec. (a)(1)(E). Act June 30, 1953, § 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 June 30, 1953, § 13(a), substituted in first sentence “July 1, 1954” for “July 1, 1953”.

1952—Subsec. (a)(1). Act July 14, 1952, § 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 Feb. 29, 1952.

Subsec. (a)(1)(E). Act July 14, 1952, § 3(a)(2), (3), changed the base date from Apr. 30, 1948 to Feb. 29, 1952, and exempted defense or disaster mortgages from the limitation of this subparagraph.

Subsec. (a)(1)(G). Act July 14, 1952, § 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. Apr. 9, 1952, increased the $200,000,000 authorization to $252,000,000 and struck out Dec. 31, 1951, deadline, (1) with respect to programed defense housing for which applications were received prior to Dec. 28, 1951, and (2) with respect to subchapter VIII military housing if the commitment to insure the mortgage was issued after Dec. 27 and before Dec. 31, 1951.

Subsec. (c)(4). Act July 14, 1952, inserted “Guam,” after “District of Columbia”.

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

Subsec. (a)(1)(G). Act Sept. 1, 1951, § 608(b), inserted proviso.

1950—Act Apr. 20, 1950, § 122, substituted “Commissioner” for “Administrator” wherever appearing.

Subsec. (a)(1). Act Apr. 20, 1950, § 116(1), (2), inserted “or section 1706c of this title” and first proviso.

Subsec. (a)(1)(E). Act Apr. 20, 1950, § 116(3), substituted new proviso for former proviso.

Subsec. (a)(1)(F). Act Apr. 20, 1950, § 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 Apr. 20, 1950, § 116(5), added par. (1)(G).

1949—Subsec. (a). Act Aug. 8, 1949, inserted reference to subchapter VIII in par. (1), and inserted proviso at end of par. (1)(E).

Subsec. (a)(1)(E). Joint Res. Oct. 25, 1949, struck out proviso and inserted new proviso.

1948—Act July 1, 1948, 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 Aug. 10, 1948, §§ 201, 202, substituted “subchapter II or VI of this chapter” for “section 1709 or 1738 of this title”, inserted “after April 30, 1948”, after “or guaranteed”, and substituted “50” for “25” in cl. (2) of par. (1) (E).

1941—Subsec. (a)(2). Act Mar. 28, 1941, substituted “subchapters II and VI” for “subchapter II”.

1939—Subsec. (b). Act June 3, 1939, amended last sentence.

Subsec. (c)(4). Act June 3, 1939, inserted “Alaska, Hawaii or Puerto Rico”.

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

Subsec. (d). Act Feb. 3, 1938, 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: Provided, 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 May 28, 1935, substituted “$5,000,000” for “$2,000,000”.

Statutory Notes and Related Subsidiaries

Effective Date of 1968 Amendment

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

Effective Date of 1949 Amendment

Joint Res. Oct. 25, 1949, ch. 729, § 7, 63 Stat. 906, 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 [Oct. 25, 1949].”

Service or Sale of Mortgages Purchased Prior to July 1, 1948; Fulfillment of Prior Commitments

Act July 1, 1948, ch. 784, § 2, 62 Stat. 1209, provided that:

“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 [

July 1, 1948], 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 [

July 1, 1948].”

Executive Documents

Delegation of Functions

Functions of President under this section delegated to Secretary of Housing and Urban Development, see Ex. Ord. No. 11732, July 30, 1973, 38 F.R. 20429, set out as a note under section 301 of Title 3, The President.