II 

108TH CONGRESS 

1ST SESSION S. 1918

To amend the Internal Revenue Code of 1986 to provide that qualified 

homeowner downpayment assistance is a charitable purpose. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 21, 2003

Mr. SANTORUM (for himself and Mrs. FEINSTEIN) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL

To amend the Internal Revenue Code of 1986 to provide 

that qualified homeowner downpayment assistance is a 

charitable purpose.

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

3 SECTION 1. QUALIFIED HOMEOWNER DOWNPAYMENT AS4 SISTANCE. 

5 (a) IN GENERAL.—Section 501 of the Internal Rev6 enue Code of 1986 (relating to exemption of tax on cor7 porations, certain trusts, etc.) is amended by redesig8 nating subsection (q) as subsection (r) and by inserting 

9 after subsection (p) the following new subsection: 
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1 ‘‘(q) QUALIFIED HOMEOWNER DOWNPAYMENT AS2 SISTANCE.—

3 ‘‘(1) IN GENERAL.—For purposes of subsection 

4 (c)(3) and sections 170(c)(2), 2055(a)(2), and 

5 2522(a)(2), the term ‘charitable purposes’ includes 

6 the provision of qualified homeowner downpayment 

7 assistance. 

8 ‘‘(2) QUALIFIED HOMEOWNER DOWNPAYMENT

9 ASSISTANCE.—For purposes of this subsection, the 

10 term ‘qualified homeowner downpayment assistance’ 

11 means a gift of cash for the purpose of providing 

12 any downpayment for a qualified home purchase. 

13 ‘‘(3) QUALIFIED HOME PURCHASE.—

14 ‘‘(A) IN GENERAL.—For purposes of this 

15 subsection, the term ‘qualified home purchase’ 

16 means the acquisition of any property as a prin17 cipal residence (within the meaning of section 

18 121) if the amount of the acquisition indebted19 ness (within the meaning of section 163(h)(3)) 

20 with respect to such property is less than the 

21 maximum mortgage amount applicable at the 

22 time the indebtedness is incurred for the area 

23 in which the property is located. 

24 ‘‘(B) MAXIMUM MORTGAGE AMOUNT.—For 

25 purposes of this paragraph, the term ‘maximum 
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1 mortgage amount’ means the maximum single2 family home mortgage loan which would be eli3 gible for insurance from the Department of 

4 Housing and Urban Development pursuant to 

5 section 203(b) or 234(c) of the National Hous6 ing Act.’’. 

7 (b) NO CHARITABLE DEDUCTION FOR CONTRIBU8 TIONS FOR DOWNPAYMENT ASSISTANCE.—Subsection (f) 

9 of section 170 of the Internal Revenue Code of 1986 (re10 lating to disallowance of deduction in certain cases and 

11 special rules) is amended by adding at the end the fol12 lowing new paragraph: 

13 ‘‘(11) DENIAL OF DEDUCTION OF CONTRIBU14 TIONS FOR DOWNPAYMENT ASSISTANCE.—No deduc15 tion shall be allowed under this section for a con16 tribution to an organization which provides home17 owner downpayment assistance if the contribution is 

18 made directly or indirectly in connection with a 

19 transaction in which the purchaser of a home re20 ceived downpayment assistance and the contrib21 utor—

22 ‘‘(A) received the downpayment assistance, 

23 ‘‘(B) sold the home to the purchaser, 

24 ‘‘(C) loaned money to the purchaser, or 
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1 ‘‘(D) otherwise received a commission or 

2 other benefit associated with the transaction.’’. 

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

4 this section shall apply to taxable years ending after the 

5 date of the enactment of this Act.

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