A chunk of the federal government's bailout money for American International Group has found its way to Hawai'i.

A financing affiliate of military housing contractor Forest City Military Communities Hawaii was able to retrieve a $773 million investment back from AIG through the federal government's infusion of roughly $180 billion in the troubled financial giant.

The $773 million was the third-highest AIG bailout payment for government-sponsored projects or investments among states between September and December, according to a list made public by AIG that showed about $12 billion in bailout money ended up in 20 states.

Just behind Hawai'i's collection was California at $1.02 billion and Virginia at $1.01 billion. Ohio was fourth at $490 million.

Much of the $12 billion went to repay guaranteed investment contracts, or GICs, that AIG issued but couldn't repay after investors sought to redeem contracts early or collect collateral after the insurer's credit rating plummeted last year.

Insurers typically offer GICs to entities with favorable tax status, and the contracts provide a guaranteed return plus the principal after a set term.

Many of the GICs were used by municipal governments that invested proceeds from bond sales until the money was needed to fund the project for which the bonds were issued.

In Hawai'i's case, GICs from AIG were obtained by Ohana Military Communities LLC, according to Robin Campaniano, president and chief executive officer of AIG Hawaii. Campaniano said the list from AIG Hawaii's parent company showed there were four GICs terminated for Ohana Military totaling $773 million.

Forest City and the U.S. Navy are members of Ohana Military, according to state records.

Ohana Military issued several bonds to finance construction and renovation of Navy and Marine Corps homes on O'ahu.

Forest City, a unit of Ohio-based Forest City Enterprises Inc., has a contract to build or refurbish about 7,000 Navy and Marine Corps homes at Marine Corps Base Hawaii in Kane'ohe Bay, around Pearl Harbor and Manana. The Navy contributed some equity to the partnership.

Last year, Forest City expected to spend $320 million building about 1,000 new homes and renovating 300 homes, while the total cost of an initial scope of work covering about 4,500 new and renovated homes is valued at about $1.5 billion through next year.

The military housing construction program has been one of the bright spots in Hawai'i's economy where private and public construction spending is projected to decline $2 billion, or 25 percent, over this year and next year, according to a University of Hawai'i Economic Research Organization forecast.