On December 12, 1977, GAO reported to the Secretary of Housing and Urban Development (HUD) that the practice of requiring the Department of Defense (DOD) to pay mortgage-insurance premiums on family housing properties owned by DOD and insured by HUD was no longer necessary. The Secretary of Defense guaranteed payment of outstanding mortgages on these properties, and Congress provided annual appropriations to repay the mortgages. In addition, DOD insurance premium payments for these properties have resulted in an insurance reserve balance of $76.5 million which exceeds the $2.1 million in reserves that HUD considers necessary to protect against default. In reply, the Secretary, HUD, concurred with the recommendation but believed that she lacked authority to waive collection of a premium. Considering the Secretary's position, only legislation can resolve the matter. Congress should amend the National Housing Act to permit the Secretary, HUD, to terminate the mortgage-insurance premium payments on DOD-owned housing mortgages.
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