I 

111TH CONGRESS 

1ST SESSION H. R. 2756 

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 

JUNE 8, 2009 

Mrs. DAVIS of California (for herself, Mr. BLUMENAUER, Mr. CALVERT, Ms. 

SPEIER, Mr. KIND, Mr. MCNERNEY, Mr. RODRIGUEZ, Mr. BACA, Mr. 

BILBRAY, and Mr. FILNER) 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 2009’’. 


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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 2010, 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 Nov 24 2008 21:58 Jun 09, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2756.IH H2756

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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 2009. 

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) AMENDMENT.—Paragraph (3) of section 

7 143(b) of the Internal Revenue Code of 1986 (relat8 ing to qualified veterans’ mortgage bond defined) is 

9 amended by inserting ‘‘(other than paragraph (2) 

10 thereof)’’ after ‘‘(g)’’. 

11 (2) IN GENERAL.—Subparagraph (C) of section 

12 143(g)(3) of the Internal Revenue Code of 1986 (re13 lating to requirements related to arbitrage) is 

14 amended by striking ‘‘1.125 percentage points’’ and 

15 inserting ‘‘1.50 percentage points’’. 

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

17 of such Code (relating to requirements related to ar18 bitrage) is amended in the heading for subparagraph 

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

20 FULL 1.125 PERCENTAGE POINTS UNDER PARAGRAPH

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

22 AMOUNTS’’. 

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

24 this section shall apply to obligations issued after the date 

25 of the enactment of this Act. 

Æ 


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