I 

113TH CONGRESS 

1ST SESSION H. R. 1885 

To amend the Internal Revenue Code of 1986 to allow eligible veterans 

to use qualified veterans mortgage bonds to refinance home loans, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 8, 2013 

Mrs. DAVIS of California (for herself, Mr. LOWENTHAL, Ms. BONAMICI, Mr. 

TAKANO, and Mr. HUFFMAN) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow eligible veterans to use qualified veterans mortgage bonds 

to refinance home loans, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Veterans Home Loan 

5 Refinance Opportunity Act of 2013’’. 


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1 SEC. 2. MODIFICATION OF QUALIFIED VETERANS’ MORT2 GAGE BONDS PROGRAM TO ALLOW ELIGIBLE 

3 VETERANS TO REFINANCE CURRENT HOME 

4 LOANS. 

5 (a) ELIMINATION OF REFINANCE PROHIBITION FOR

6 VETERANS’ BONDS.—Section 143(b) of the Internal Rev7 enue Code of 1986 (relating to qualified veterans’ mort8 gage bond defined) is amended— 

9 (1) in paragraph (1) by striking ‘‘residences’’ 

10 and inserting ‘‘residences or qualified refinancing 

11 loans’’, and 

12 (2) in paragraph (3) by striking ‘‘(i)(1),’’. 

13 (b) DEFINITION.—Section 143(l) of the Internal Rev14 enue Code of 1986 (relating to additional requirements for 

15 qualified veterans’ mortgage bonds) is amended by adding 

16 at the end the following: 

17 ‘‘(6) QUALIFIED REFINANCING LOAN.—For 

18 purposes of this subsection, the term ‘qualified refi19 nancing loan’ means a loan that is used to refinance 

20 acquisition indebtedness (as defined in subclauses (I) 

21 and (II) of section 163(h)(3)(B)(i)) for a principal 

22 residence (within the meaning of section 121).’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to bonds issued after the date of 

25 enactment of this Act. 


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1 SEC. 3. INFLATION ADJUSTMENT OF STATE VETERANS 

2 LIMIT. 

3 (a) IN GENERAL.—Paragraph (3) of section 143(l) 

4 of the Internal Revenue Code of 1986 (relating to volume 

5 limitation) is amended by adding at the end the following 

6 new subparagraph: 

7 ‘‘(D) LIMITATION ADJUSTMENT BASED ON

8 INFLATION.— 

9 ‘‘(i) IN GENERAL.—In the case of any 

10 calendar year after 2013, the limit deter11 mined under subparagraph (B) for a State 

12 shall be adjusted for such calendar year by 

13 multiplying such limit by the inflation ad14 justment factor for the calendar year. 

15 ‘‘(ii) COMPUTATION OF INFLATION

16 ADJUSTMENT FACTOR.—For purposes of 

17 clause (i)— 

18 ‘‘(I) IN GENERAL.—The Sec19 retary shall, not later than each Octo20 ber 1, determine and publish in the 

21 Federal Register the inflation adjust22 ment factor for the succeeding cal23 endar year in accordance with this 

24 clause. 

25 ‘‘(II) INFLATION ADJUSTMENT

26 FACTOR.—The term ‘inflation adjustVerDate Mar 15 2010 02:03 May 11, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1885.IH H1885

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1 ment factor’ means, with respect to a 

2 calendar year, a fraction the numer3 ator of which is the CMHPI for the 

4 second quarter of the calendar year 

5 preceding the calendar year for which 

6 the adjustment is being made, and the 

7 denominator of which is the CMHPI 

8 for the second quarter of calendar 

9 year 2013. 

10 ‘‘(III) CMHPI.—The term 

11 ‘CMHPI’ means the Conventional 

12 Mortgage Home Price Index compiled 

13 by Federal Home Loan Mortgage Cor14 poration. The CMHPI for any quarter 

15 shall be the CMHPI first published 

16 for such quarter. 

17 ‘‘(IV) LIMITATION.—No adjust18 ment shall be made under clause (i) 

19 for any year in which the fraction in 

20 subclause (II) is less than 1.’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to bonds issued after the date of 

23 the enactment of this Act. 


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1 SEC. 4. MODIFICATION OF MATERIALLY HIGHER YIELD 

2 FOR MORTGAGES MADE FROM QUALIFIED 

3 VETERANS’ MORTGAGE BONDS. 

4 (a) MORTGAGE YIELD LIMITATION MEASURED

5 UNDER GENERAL PROGRAM OBLIGATION PROVISIONS.— 

6 (1) EFFECTIVE MORTGAGE INTEREST LIMITA7 TION EXCEPTED.—Paragraph (3) of section 143(b) 

8 of the Internal Revenue Code of 1986 (relating to 

9 qualified veterans’ mortgage bond defined) is amend10 ed by inserting ‘‘(other than paragraph (2) thereof)’’ 

11 after ‘‘(g)’’. 

12 (2) INCREASE IN YIELD LIMIT.—Subparagraph 

13 (C) of section 143(g)(3) of the Internal Revenue 

14 Code of 1986 (relating to requirements related to ar15 bitrage) is amended by striking ‘‘1.125 percentage 

16 points’’ and inserting ‘‘1.50 percentage points’’. 

17 (3) CLERICAL AMENDMENT.—Section 143(g)(3) 

18 of such Code (relating to requirements related to ar19 bitrage) is amended in the heading for subparagraph 

20 (C) by striking ‘‘WHERE ISSUER DOES NOT USE

21 FULL 1.125 PERCENTAGE POINTS UNDER PARAGRAPH

22 (2)’’ and inserting ‘‘FOR CERTAIN UNUSED

23 AMOUNTS’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to obligations issued after the date 

3 of the enactment of this Act. 

Æ 


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