II 

111TH CONGRESS 

1ST SESSION S. 253 

To amend the Internal Revenue Code of 1986 to expand the application 

of the homebuyer credit, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 15, 2009 

Mr. ISAKSON (for himself, Mr. CHAMBLISS, and Mr. CORKER) 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 expand 

the application of the homebuyer credit, 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 ‘‘Fix Housing First 

5 Homebuyer Tax Credit Act’’. 

6 SEC. 2. EXPANSION AND MODIFICATION OF HOMEBUYER 

7 CREDIT. 

8 (a) ELIMINATION OF FIRST-TIME HOMEBUYER RE9 QUIREMENT.— 


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1 (1) IN GENERAL.—Subsection (a) of section 36 

2 of the Internal Revenue Code of 1986, as added by 

3 section 3011 of the Housing and Economic Recovery 

4 Act of 2008, is amended by striking ‘‘who is a first5 time homebuyer of a principal residence’’ and insert6 ing ‘‘who purchases a principal residence’’. 

7 (2) CONFORMING AMENDMENTS.— 

8 (A) Subsection (c) of section 36 of such 

9 Code is amended by striking paragraph (1) and 

10 by redesignating paragraphs (2), (3), (4), and 

11 (5) as paragraphs (1), (2), (3), and (4), respec12 tively. 

13 (B) Section 36 of such Code is amended by 

14 striking ‘‘FIRST-TIME HOMEBUYER CREDIT’’ 

15 in the heading and inserting ‘‘HOME PUR16 CHASE CREDIT’’. 

17 (C) The table of sections for subpart C of 

18 part IV of subchapter A of chapter 1 of such 

19 Code is amended by striking the item relating 

20 to section 36 and inserting the following new 

21 item: 

‘‘Sec. 36. Home purchase credit.’’. 

22 (D) Subparagraph (W) of section 26(b)(2) 

23 of such Code is amended by striking ‘‘home24 buyer credit’’ and inserting ‘‘home purchase 

25 credit’’. 


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1 (b) ELIMINATION OF RECAPTURE EXCEPT FOR

2 HOMES SOLD WITHIN 3 YEARS.—Subsection (f) of sec3 tion 36 of the Internal Revenue Code of 1986, as so added, 

4 is amended to read as follows: 

5 ‘‘(f) RECAPTURE OF CREDIT IN THE CASE OF CER6 TAIN DISPOSITIONS.— 

7 ‘‘(1) IN GENERAL.—In the event that a tax8 payer— 

9 ‘‘(A) disposes of the principal residence 

10 with respect to which a credit was allowed 

11 under subsection (a), or 

12 ‘‘(B) fails to occupy such residence as the 

13 taxpayer’s principal residence, 

14 at any time within 36 months after the date on 

15 which the taxpayer purchased such residence, then 

16 the tax imposed by this chapter for the taxable year 

17 during which such disposition occurred or in which 

18 the taxpayer failed to occupy the residence as a prin19 cipal residence shall be increased by the amount of 

20 such credit. 

21 ‘‘(2) EXCEPTIONS.— 

22 ‘‘(A) DEATH OF TAXPAYER.—Paragraph 

23 (1) shall not apply to any taxable year ending 

24 after the date of the taxpayer’s death. 


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1 ‘‘(B) INVOLUNTARY CONVERSION.—Para2 graph (1) shall not apply in the case of a resi3 dence which is compulsorily or involuntarily 

4 converted (within the meaning of section 

5 1033(a)) if the taxpayer acquires a new prin6 cipal residence within the 2-year period begin7 ning on the date of the disposition or cessation 

8 referred to in such paragraph. Paragraph (1) 

9 shall apply to such new principal residence dur10 ing the remainder of the 36-month period de11 scribed in such paragraph as if such new prin12 cipal residence were the converted residence. 

13 ‘‘(C) TRANSFERS BETWEEN SPOUSES OR

14 INCIDENT TO DIVORCE.—In the case of a trans15 fer of a residence to which section 1041(a) ap16 plies— 

17 ‘‘(i) paragraph (1) shall not apply to 

18 such transfer, and 

19 ‘‘(ii) in the case of taxable years end20 ing after such transfer, paragraph (1) shall 

21 apply to the transferee in the same manner 

22 as if such transferee were the transferor 

23 (and shall not apply to the transferor). 

24 ‘‘(D) RELOCATION OF MEMBERS OF THE

25 ARMED FORCES.—Paragraph (1) shall not 


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1 apply in the case of a member of the Armed 

2 Forces of the United States on active duty who 

3 moves pursuant to a military order and incident 

4 to a permanent change of station. 

5 ‘‘(3) JOINT RETURNS.—In the case of a credit 

6 allowed under subsection (a) with respect to a joint 

7 return, half of such credit shall be treated as having 

8 been allowed to each individual filing such return for 

9 purposes of this subsection. 

10 ‘‘(4) RETURN REQUIREMENT.—If the tax im11 posed by this chapter for the taxable year is in12 creased under this subsection, the taxpayer shall, 

13 notwithstanding section 6012, be required to file a 

14 return with respect to the taxes imposed under this 

15 subtitle.’’. 

16 (c) EXPANSION OF APPLICATION PERIOD.—Sub17 section (h) of section 36 of the Internal Revenue Code of 

18 1986, as so added, is amended by striking ‘‘July 1, 2009’’ 

19 and inserting ‘‘December 31, 2009’’. 

20 (d) ELECTION TO TREAT PURCHASE IN PRIOR

21 YEAR.—Subsection (g) of section 36 of the Internal Rev22 enue Code of 1986, as so added, is amended by striking 

23 ‘‘July 1, 2009’’ and inserting ‘‘December 31, 2009’’. 

24 (e) MODIFICATION OF CREDIT AMOUNT.— 


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1 (1) IN GENERAL.—Subparagraph (A) of section 

2 36(b)(1) of the Internal Revenue Code of 1986, as 

3 so added, is amended by striking ‘‘$7,500’’ and in4 serting ‘‘the amount that is 3.5 percent of the dollar 

5 amount limitation determined under section 

6 305(a)(2) of the Federal Home Loan Mortgage Cor7 poration Act (12 U.S.C. 1454(a)(2)), including any 

8 increase in the limitation for an area determined to 

9 be a high-cost area under such section, with respect 

10 to the purchase of the qualified principal residence’’. 

11 (2) CONFORMING AMENDMENTS.—Paragraph 

12 (1) of section 36(b) of such Code is amended— 

13 (A) by striking ‘‘$3,750’’ in subparagraph 

14 (B) and inserting ‘‘1.75 percent’’, 

15 (B) by striking ‘‘$7,500’’ in subparagraph 

16 (B) and inserting ‘‘3.5 percent’’, and 

17 (C) by striking ‘‘$7,500’’ in subparagraph 

18 (C) and inserting ‘‘the amount described in 

19 subparagraph (A)’’. 

20 (f) MODIFICATION OF INCOME LIMITATION.—Sub21 clause (II) of section 36(b)(2)(i) of the Internal Revenue 

22 Code of 1986, as so added, is amended by striking 

23 ‘‘$75,000 ($150,000 in the case of a joint return)’’ and 

24 inserting ‘‘$125,000 ($250,000 in the case of a joint re25 turn)’’. 


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1 (g) AVAILABILITY OF CREDIT FOR TRANSFER.—Sec2 tion 36 of the Internal Revenue Code of 1986, as so added, 

3 is amended by redesignating subsections (g) and (h), as 

4 amended by this section, as subsections (h) and (i), respec5 tively, and by inserting after subsection (f) the following 

6 new subsection: 

7 ‘‘(g) TRANSFER OF CREDIT.— 

8 ‘‘(1) IN GENERAL.—A taxpayer may transfer 

9 all or a portion of the credit allowable under sub10 section (a) to 1 or more persons as payment of any 

11 liability of the taxpayer arising out of— 

12 ‘‘(A) the downpayment of any portion of 

13 the purchase price of the principal residence, 

14 ‘‘(B) mortgage, flood, and hazard insur15 ance premiums in connection with the purchase 

16 and paid at or before closing, 

17 ‘‘(C) interest on any debt incurred to pur18 chase the residence, 

19 ‘‘(D) State and local real property taxes 

20 paid in connection with the purchase, and 

21 ‘‘(E) funding fees paid to the Department 

22 of Veterans Affairs in connection with the pur23 chase. 

24 ‘‘(2) CREDIT TRANSFER MECHANISM.— 


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1 ‘‘(A) IN GENERAL.—Not less than 60 days 

2 after the date of the enactment of this sub3 section, the Secretary shall establish and imple4 ment a credit transfer mechanism for purposes 

5 of paragraph (1). Such mechanism shall require 

6 the Secretary to— 

7 ‘‘(i) certify that the taxpayer is eligi8 ble to receive the credit provided by this 

9 section with respect to the purchase of a 

10 principal residence and that the transferee 

11 is eligible to receive the credit transfer, 

12 ‘‘(ii) certify the credit transfer 

13 amount which will be paid to the trans14 feree, and 

15 ‘‘(iii) require any transferee that di16 rectly receives the credit transfer amount 

17 from the Secretary to notify the taxpayer 

18 within 14 days of the receipt of such 

19 amount. 

20 Any check, certificate, or voucher issued by the 

21 Secretary pursuant to this paragraph shall in22 clude the taxpayer identification number of the 

23 taxpayer and the address of the principal resi24 dence being purchased. For purposes of deter25 mining the credit transfer amount under clause 


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1 (ii), the Secretary may estimate the taxpayer’s 

2 modified adjusted gross income for the taxable 

3 year (as described in subsection (b)(2)) based 

4 on the taxpayer’s modified adjusted gross in5 come (as so described) for the preceding taxable 

6 year. 

7 ‘‘(B) TIMELY RECEIPT.—The Secretary 

8 shall issue the credit transfer amount not less 

9 than 30 days after the date of the receipt of an 

10 application for a credit transfer. 

11 ‘‘(3) PAYMENT OF INTEREST.— 

12 ‘‘(A) IN GENERAL.—Notwithstanding any 

13 other provision of this title, the Secretary shall 

14 pay interest on any amount which is not paid 

15 to a person during the 30-day period described 

16 in paragraph (2)(B). 

17 ‘‘(B) AMOUNT OF INTEREST.—Interest 

18 under subparagraph (A) shall be allowed and 

19 paid— 

20 ‘‘(i) from the day after the 30-day pe21 riod described in paragraph (2)(B) to the 

22 date payment is made, and 

23 ‘‘(ii) at the overpayment rate estab24 lished under section 6621. 


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1 ‘‘(C) EXCEPTION.—This paragraph shall 

2 not apply to failures to make payments as a re3 sult of any natural disaster or other cir4 cumstance beyond the control of the Secretary. 

5 ‘‘(4) RECAPTURE OF TRANSFER AMOUNT.—If 

6 the credit transfer amount paid to the transferee ex7 ceeds the amount of the credit allowable under sub8 section (a) to the taxpayer, the taxpayer’s tax im9 posed by this chapter for the taxable year shall be 

10 increased by the amount of such excess. 

11 ‘‘(5) EFFECT ON LEGAL RIGHTS AND OBLIGA12 TIONS.—Nothing in this subsection shall be con13 strued to— 

14 ‘‘(A) require a lender to complete a loan 

15 transaction before the credit transfer amount 

16 has been transferred to the lender, or 

17 ‘‘(B) prevent a lender from altering the 

18 terms of a loan (including the rate, points, fees, 

19 and other costs) due to changes in market con20 ditions or other factors during the period of 

21 time between the application by the taxpayer 

22 for a credit transfer and the receipt by the 

23 lender of the credit transfer amount.’’. 

24 (h) ALLOWANCE OF CREDIT FOR RESIDENCES FI25 NANCED BY PROCEEDS FROM STATE OR LOCAL


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1 BONDS.—Subsection (d) of section 36 of the Internal Rev2 enue Code of 1986, as so added, is amended by striking 

3 paragraph (2) and redesignating paragraphs (3) and (4) 

4 as paragraphs (2) and (3), respectively. 

5 (i) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to residences purchased on or after 

7 December 31, 2008, in taxable years ending on or after 

8 such date. 

Æ 


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