‘‘(C) QUALIFIED
NONPROFIT
ORGANIZA-
TION.—For purposes of this paragraph, the 
term ‘qualified nonprofit organization’ means 
any organization if—
‘‘(i) such organization is described in 
paragraph (3) or (4) of section 501(c) and 
is exempt from tax under section 501(a), 
‘‘(ii) such organization is determined 
by the State homeownership credit agency 
not to be affiliated with or controlled by a 
for-profit organization, and 
‘‘(iii) 1 of the exempt purposes of 
such organization includes the fostering of 
low-income housing. 
‘‘(D) TREATMENT
OF
CERTAIN
SUBSIDI-
ARIES.—
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, a qualified nonprofit orga-
nization shall be treated as satisfying the 
ownership and material participation test 
of subparagraph (B) if any qualified cor-
poration in which such organization holds 
stock satisfies such test. 
‘‘(ii) QUALIFIED CORPORATION.—For 
purposes of clause (i), the term ‘qualified
corporation’ means any corporation if 100 
percent of the stock of such corporation is 
held by 1 or more qualified nonprofit orga-
nizations at all times during the period 
such corporation is in existence. 
‘‘(E) STATE
MAY
NOT
OVERRIDE
SET-
ASIDE.—Nothing in subparagraph (E) of para-
graph (2) shall be construed to permit a State 
not to comply with subparagraph (A) of this 
paragraph. 
‘‘(4) LIMITATION ON ALLOCATIONS TO AREAS 
OF CHRONIC ECONOMIC DISTRESS.—No more than 
50 percent of a homeownership credit agency’s por-
tion of the State homeownership credit ceiling for a 
calendar year may be allocated to residences located 
in areas that—
‘‘(A) are designated as areas of chronic 
economic distress in accordance with paragraph 
(1) of subsection (c), and 
‘‘(B) that do not meet the requirements of 
clause (i), (ii), or (iii) of subsection (c)(1)(A). 
‘‘(5) SPECIAL RULES.—
‘‘(A) RESIDENCE
MUST
BE
LOCATED 
WITHIN JURISDICTION OF CREDIT AGENCY.—A 
homeownership credit agency may allocate its
aggregate homeownership credit dollar amount 
only to qualified residences located in the juris-
diction of the governmental unit of which such 
agency is a part. 
‘‘(B) AGENCY ALLOCATIONS IN EXCESS OF 
LIMIT.—If the aggregate homeownership credit 
dollar amounts allocated by a homeownership 
credit agency for any calendar year exceed the 
portion of the State homeownership credit ceil-
ing allocated to such agency for such calendar 
year, the homeownership credit dollar amounts 
so allocated shall be reduced (to the extent of 
such excess) for residences in the reverse of the 
order in which the allocations of such amounts 
were made. 
‘‘(g) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) 
COMPLETED.—The 
term 
‘completed’ 
means the point in time where a qualified residence 
is first placed in a condition or state of readiness 
and availability for occupancy. 
‘‘(2) PROJECT.—The term ‘project’ means 1 or 
more residences together with functionally related 
and subordinate facilities developed and made avail-
able to inhabitants of such residences, including rec-
reational facilities and parking areas. To constitute 
a project, each residence must—
‘‘(A) be developed by the same taxpayer 
pursuant to common planning and feasibility 
studies, 
‘‘(B) be financed through a common plan 
of construction financing, and 
‘‘(C) have common ownership prior to sale. 
For purposes of this paragraph, it is not necessary 
that all residences within a project be contiguous or 
that all residences consist only of either new resi-
dences or existing residences and it is not necessary 
that each residence within a project be a qualified 
residence. 
‘‘(3) QUALIFIED BUYER.—
‘‘(A) IN
GENERAL.—The term ‘qualified 
buyer’ means a buyer if at the time of the ac-
quisition of the qualified residence, the buyer—
‘‘(i) is 1 or more individuals whose in-
come does not exceed 80 percent of the 
area median gross income (70 percent for 
families of less than 3 members), and 
‘‘(ii) intends to occupy the residence 
as the buyer’s principal residence (within 
the meaning of section 121).
‘‘(B) SPECIAL RULES IN QUALIFIED CEN-
SUS
TRACTS.—With respect to residences lo-
cated in qualified census tracts (as defined in 
section 42), subparagraph (A) shall be applied 
by substituting ‘100 percent’ for ‘80 percent’ 
and ‘90 percent’ for ‘70 percent’. 
‘‘(C) DETERMINATION
OF
INCOME.—For 
purposes of this paragraph, a buyer’s income 
shall be determined in accordance with section 
143(f)(4). 
‘‘(4) NEW QUALIFIED RESIDENCE.—The term 
‘new qualified residence’ means a qualified residence 
the original ownership of which begins with the tax-
payer. 
‘‘(5) EXISTING
QUALIFIED
RESIDENCE.—The 
term ‘existing qualified residence’ means any quali-
fied residence which is not a new qualified residence. 
‘‘(6) HOMEOWNERSHIP CREDIT AGENCY.—The 
term ‘homeownership credit agency’ means any 
agency authorized to carry out this section. 
‘‘(7) POSSESSIONS TREATED AS STATES.—The 
term ‘State’ includes the District of Columbia and a 
possession of the United States. 
‘‘(8) APPLICATION TO ESTATES AND TRUSTS.—
In the case of an estate or trust, the amount of the