42 U.S.C. § 1437i
Obligations of public housing agencies; contestability; full faith and credit of United States pledged as security; tax exemption (THE PUBLIC HEALTH AND WELFARE (42 U.S.C.))
Operative Text
Obligations issued by a public housing agency in connection with low-income housing projects which (1) are secured (A) by a pledge of a loan under any agreement between such public housing agency and the Secretary, or (B) by a pledge of annual contributions under an annual contributions contract between such public housing agency and the Secretary, or (C) by a pledge of both annual contributions under an annual contributions contract and a loan under an agreement between such public housing agency and the Secretary, and (2) bear, or are accompanied by, a certificate of the Secretary that such obligations are so secured, shall be incontestable in the hands of a bearer and the full faith and credit of the United States is pledged to the payment of all amounts agreed to be paid by the Secretary as security for such obligations. Except as provided in , obligations, including interest thereon, issued by public housing agencies in connection with low-income housing projects shall be exempt from all taxation now or hereafter imposed by the United States whether paid by such agencies or by the Secretary. The income derived by such agencies from such projects shall be exempt from all taxation now or hereafter imposed by the United States.
Under 42 U.S.C. § 1437i, when a public housing agency issues financial obligations tied to low-income housing projects and those obligations are backed by pledges of loans or annual contributions from the federal government — and carry a certificate from the Secretary confirming that backing — the United States government guarantees payment, making those obligations legally unassailable by anyone holding them. Additionally, the provision establishes that such obligations, including any interest they generate, are generally exempt from federal taxation, as is the income that public housing agencies derive from these projects. This creates a federally secured and tax-advantaged financing structure specifically designed to support low-income public housing development.
Plain English — not legal advice.
Public housing agencies operating under 42 U.S.C. § 1437i that issue obligations in connection with low-income housing projects typically ensure those instruments are properly secured through pledges of loans or annual contributions contracts with the Secretary, and that the required federal certificate accompanies them. Compliant agencies also account for the federal tax-exempt status of these obligations and the income derived from covered projects when structuring their financial reporting and agreements. Operators generally work with their legal and financial teams to confirm that all documentation aligns with the federal requirements that trigger both the incontestability protection and the tax exemption.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
While 42 U.S.C. § 1437i primarily governs the financial and legal structure of public housing agency obligations rather than individual tenant rights, it reflects the federal government's commitment to securing the funding mechanisms that support low-income housing projects where tenants reside. Tenants who believe the financial integrity or federal backing of their housing program is being misrepresented or mismanaged may find it useful to contact their local public housing authority for information, or to reach out to a tenant-rights organization familiar with federal housing programs. HUD's public resources and local housing advocacy groups can help tenants understand how provisions like § 1437i fit into the broader framework of protections and funding that sustain their housing.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 3, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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