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DOCUMENT FESU! E
04299 - [B3474712]
[Department of Housing and Urban Development's Requirement rhat
the Department of Defense Pay Mortgage Insurance Premiums on
Wherry and Capehart Family Housing Properties]. CED-78-14;
B-!33102. December 12, 1977. 4 pp.
Report to Patricia R. Harris, Secretary, Department of Housing
and Urban Development; by Henry Eschwege, Director, Community
and Economic Development Div.
Issue Area: Domestic Housing and Community Development (2100).
Contact: Community and Economic Development Div.
Budget Function: National Defense: Defense-related Activities
(054); Commerce and Transportation: Mort;age Credit ard
Thrift Insurance (401).
Organization Concerned: Department of Defense; Department of
Housing and Urban Development: Federal Housing
Administration.
Congressional Relevance: House Committee on Banking, Finance and
Urban Affairs; Senate Committee on Banking, Housing and
Urban Affairs.
Authority: National Housing Act, as amended (P.L. ,1-211).
Housing Amendments ef 1955 (P... 84-345). P.L. 84-348, sec.
404.
The Department of Housing and Urban Development (H1D)
requires the Department of Defense (DOD) to pay mortgage
insurance premi-ms on Wherry and Capehart favily housing
proper'ies owned by DOD and insured by HUD. A review of this
practie indicated that it is no lcnger necessary for hUD to
require DOD to insure HUD against rOD's default, especially
since DOD has guaranteed the payment of these mortgages and the
Congress has provided annual. approrriations to repay the
mortgages. Findings!Conclusions: rOD's insurance premium
payments have resulted in an insurance reserve balance in the
Armed Services Housing Mortgage Insurance Fund (ASHMIF) of S76.5
million which far exceeds the $2.1 million in reserves that fUD
considers necessary to insure itself against default. DOD has
requested on several occasions that th? Secretary of HUD no
longer require the mortgage insurance premiums. HUD has
maintained that, 4hile AShMIF has excess reserves, the
Servicemen's Mortgage Insurance Fund had a reJerv% requirement
deficit of about $29.9 million, and the premiums from kSHMIF are
needed to help offset this deficit. The excess reserves of $74.4
million accumulated from the Capehart/lwherry programs are more
than sufficient to offset the $29.9 million reserve requirement
deficit in the Servicrmen's lortgage Insurance Fund and to
negate any increase in the Servicemen's insurance premiums if
HOD did not require further premiums from the Capehart/Wherry
program. Recommendations: The Socretary of Housing and Urban
Development should terminate the required payment of mortgage
insurance premiums on Sherry and Capehart family housing](ViewImageLocal?handle=hein.gao/gaobaawih0001&div=1&collection=&method=preview&ext=.png&size=3)