I 
112TH CONGRESS 
1ST SESSION 
H. R. 834 
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 
FEBRUARY 28, 2011 
Mrs. DAVIS of California (for herself, Mr. WU, Mr. KIND, Mr. DEFAZIO, Mr. 
BLUMENAUER, Mr. SCHRADER, Mr. FILNER, Mr. CALVERT, and Ms. 
BALDWIN) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow eligi-
ble veterans to use qualified veterans mortgage bonds 
to refinance home loans, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Veterans Home Loan 
Refinance Opportunity Act of 2011’’. 
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SEC. 2. MODIFICATION OF QUALIFIED VETERANS’ MORT-
GAGE BONDS PROGRAM TO ALLOW ELIGIBLE 
VETERANS TO REFINANCE CURRENT HOME 
LOANS. 
(a) ELIMINATION OF REFINANCE PROHIBITION FOR 
VETERANS’ BONDS.—Section 143(b) of the Internal Rev-
enue Code of 1986 (relating to qualified veterans’ mort-
gage bond defined) is amended— 
(1) in paragraph (1) by striking ‘‘residences’’ 
and inserting ‘‘residences or qualified refinancing 
loans’’, and 
(2) in paragraph (3) by striking ‘‘(i)(1),’’. 
(b) DEFINITION.—Section 143(l) of the Internal Rev-
enue Code of 1986 (relating to additional requirements for 
qualified veterans’ mortgage bonds) is amended by adding 
at the end the following: 
‘‘(6) QUALIFIED
REFINANCING
LOAN.—For 
purposes of this subsection, the term ‘qualified refi-
nancing loan’ means a loan that is used to refinance 
acquisition indebtedness (as defined in subclauses (I) 
and (II) of section 163(h)(3)(B)(i)) for a principal 
residence (within the meaning of section 121).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
enactment of this Act. 
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SEC. 3. INFLATION ADJUSTMENT OF STATE VETERANS 
LIMIT. 
(a) IN GENERAL.—Paragraph (3) of section 143(l) 
of the Internal Revenue Code of 1986 (relating to volume 
limitation) is amended by adding at the end the following 
new subparagraph: 
‘‘(D) LIMITATION ADJUSTMENT BASED ON 
INFLATION.— 
‘‘(i) IN GENERAL.—In the case of any 
calendar year after 2011, the limit deter-
mined under subparagraph (B) for a State 
shall be adjusted for such calendar year by 
multiplying such limit by the inflation ad-
justment factor for the calendar year. 
‘‘(ii) COMPUTATION
OF
INFLATION 
ADJUSTMENT
FACTOR.—For purposes of 
clause (i)— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall, not later than each Octo-
ber 1, determine and publish in the 
Federal Register the inflation adjust-
ment factor for the succeeding cal-
endar year in accordance with this 
clause. 
‘‘(II) INFLATION
ADJUSTMENT 
FACTOR.—The term ‘inflation adjust-
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ment factor’ means, with respect to a 
calendar year, a fraction the numer-
ator of which is the CMHPI for the 
second quarter of the calendar year 
preceding the calendar year for which 
the adjustment is being made, and the 
denominator of which is the CMHPI 
for the second quarter of calendar 
year 2011. 
‘‘(III) 
CMHPI.—The 
term 
‘CMHPI’ means the Conventional 
Mortgage Home Price Index compiled 
by Federal Home Loan Mortgage Cor-
poration. The CMHPI for any quarter 
shall be the CMHPI first published 
for such quarter. 
‘‘(IV) LIMITATION.—No adjust-
ment shall be made under clause (i) 
for any year in which the fraction in 
subclause (II) is less than 1.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
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SEC. 4. MODIFICATION OF MATERIALLY HIGHER YIELD 
FOR MORTGAGES MADE FROM QUALIFIED 
VETERANS’ MORTGAGE BONDS. 
(a) MORTGAGE
YIELD
LIMITATION
MEASURED 
UNDER GENERAL PROGRAM OBLIGATION PROVISIONS.— 
(1) EFFECTIVE MORTGAGE INTEREST LIMITA-
TION EXCEPTED.—Paragraph (3) of section 143(b) 
of the Internal Revenue Code of 1986 (relating to 
qualified veterans’ mortgage bond defined) is amend-
ed by inserting ‘‘(other than paragraph (2) thereof)’’ 
after ‘‘(g)’’. 
(2) INCREASE IN YIELD LIMIT.—Subparagraph 
(C) of section 143(g)(3) of the Internal Revenue 
Code of 1986 (relating to requirements related to ar-
bitrage) is amended by striking ‘‘1.125 percentage 
points’’ and inserting ‘‘1.50 percentage points’’. 
(3) CLERICAL AMENDMENT.—Section 143(g)(3) 
of such Code (relating to requirements related to ar-
bitrage) is amended in the heading for subparagraph 
(C) by striking ‘‘WHERE
ISSUER
DOES
NOT
USE 
FULL 1.125 PERCENTAGE POINTS UNDER PARAGRAPH 
(2)’’ 
and 
inserting 
‘‘FOR
CERTAIN
UNUSED 
AMOUNTS’’. 
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