I 

108TH CONGRESS 

1ST SESSION H. R. 284

To amend the Internal Revenue Code of 1986 to repeal the required use 

of certain principal repayments on mortgage subsidy bond financings 

to redeem bonds, to modify the purchase price limitation under mortgage 

subsidy bond rules based on median family income, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2003

Mr. HOUGHTON (for himself and Mr. NEAL of Massachusetts) 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 repeal 

the required use of certain principal repayments on mortgage subsidy bond financings to redeem bonds, to modify 

the purchase price limitation under mortgage subsidy 

bond rules based on median family income, 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 ‘‘Housing Bond and 

5 Credit Modernization and Fairness Act of 2003’’.
2

•HR 284 IH 

1 SEC. 2. REPEAL OF REQUIRED USE OF CERTAIN PRINCIPAL 

2 REPAYMENTS ON MORTGAGE SUBSIDY BOND 

3 FINANCINGS TO REDEEM BONDS. 

4 (a) IN GENERAL.—Subparagraph (A) of section 

5 143(a)(2) of the Internal Revenue Code of 1986 (defining 

6 qualified mortgage issue) is amended by adding ‘‘and’’ at 

7 the end of clause (ii), by striking ‘‘, and’’ at the end of 

8 clause (iii) and inserting a period, and by striking clause 

9 (iv) and the last sentence. 

10 (b) CONFORMING AMENDMENT.—Clause (ii) of sec11 tion 143(a)(2)(D) of such Code is amended by striking 

12 ‘‘(and clause (iv) of subparagraph (A))’’. 

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

14 this section shall apply to repayments received after the 

15 date of the enactment of this Act.

16 SEC. 3. MODIFICATION OF PURCHASE PRICE LIMITATION 

17 UNDER MORTGAGE SUBSIDY BOND RULES 

18 BASED ON MEDIAN FAMILY INCOME. 

19 (a) IN GENERAL.—Paragraph (1) of section 143(e) 

20 of the Internal Revenue Code of 1986 (relating to pur21 chase price requirement) is amended to read as follows: 

22 ‘‘(1) IN GENERAL.—An issue meets the require23 ments of this subsection only if the acquisition cost 

24 of each residence the owner-financing of which is 

25 provided under the issue does not exceed the greater 

26 of—
3

•HR 284 IH 

1 ‘‘(A) 90 percent of the average area pur2 chase price applicable to the residence, or 

3 ‘‘(B) 3.5 times the applicable median fam4 ily income (as defined in subsection (f)).’’

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to financing provided, and mort7 gage credit certificates issued, after the date of the enact8 ment of this Act. 

9 SEC. 4. DETERMINATION OF AREA MEDIAN GROSS INCOME 

10 FOR LOW-INCOME HOUSING CREDIT 

11 PROJECTS. 

12 (a) IN GENERAL.—Paragraph (4) of section 42(g) of 

13 the Internal Revenue Code of 1986 (relating to certain 

14 rules made applicable) is amended by striking the period 

15 at the end and inserting ‘‘and the term ‘area median gross 

16 income’ means the amount equal to the greater of—

17 ‘‘(A) the area median gross income deter18 mined under section 142(d)(2)(B), or 

19 ‘‘(B) the statewide median gross income 

20 for the State in which the project is located.’’

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

22 this section shall apply to—

23 (1) housing credit dollar amounts allocated 

24 after the date of the enactment of this Act, and 
4

•HR 284 IH 

1 (2) buildings placed in service after such date 

2 to the extent paragraph (1) of section 42(h) of the 

3 Internal Revenue Code of 1986 does not apply to 

4 any building by reason of paragraph (4) thereof.

Æ