I 
108TH CONGRESS 
1ST SESSION 
H. R. 284
To amend the Internal Revenue Code of 1986 to repeal the required use 
of certain principal repayments on mortgage subsidy bond financings 
to redeem bonds, to modify the purchase price limitation under mortgage 
subsidy bond rules based on median family income, and for other pur-
poses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 8, 2003
Mr. HOUGHTON (for himself and Mr. NEAL of Massachusetts) 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 repeal 
the required use of certain principal repayments on mort-
gage subsidy bond financings to redeem bonds, to modify 
the purchase price limitation under mortgage subsidy 
bond rules based on median family income, 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 ‘‘Housing Bond and 
Credit Modernization and Fairness Act of 2003’’.
SEC. 2. REPEAL OF REQUIRED USE OF CERTAIN PRINCIPAL 
REPAYMENTS ON MORTGAGE SUBSIDY BOND 
FINANCINGS TO REDEEM BONDS. 
(a) IN GENERAL.—Subparagraph (A) of section 
143(a)(2) of the Internal Revenue Code of 1986 (defining 
qualified mortgage issue) is amended by adding ‘‘and’’ at 
the end of clause (ii), by striking ‘‘, and’’ at the end of 
clause (iii) and inserting a period, and by striking clause 
(iv) and the last sentence. 
(b) CONFORMING AMENDMENT.—Clause (ii) of sec-
tion 143(a)(2)(D) of such Code is amended by striking 
‘‘(and clause (iv) of subparagraph (A))’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to repayments received after the 
date of the enactment of this Act.
SEC. 3. MODIFICATION OF PURCHASE PRICE LIMITATION 
UNDER MORTGAGE SUBSIDY BOND RULES 
BASED ON MEDIAN FAMILY INCOME. 
(a) IN GENERAL.—Paragraph (1) of section 143(e) 
of the Internal Revenue Code of 1986 (relating to pur-
chase price requirement) is amended to read as follows: 
‘‘(1) IN GENERAL.—An issue meets the require-
ments of this subsection only if the acquisition cost 
of each residence the owner-financing of which is 
provided under the issue does not exceed the greater 
of—
‘‘(A) 90 percent of the average area pur-
chase price applicable to the residence, or 
‘‘(B) 3.5 times the applicable median fam-
ily income (as defined in subsection (f)).’’
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to financing provided, and mort-
gage credit certificates issued, after the date of the enact-
ment of this Act. 
SEC. 4. DETERMINATION OF AREA MEDIAN GROSS INCOME 
FOR 
LOW-INCOME 
HOUSING 
CREDIT 
PROJECTS. 
(a) IN GENERAL.—Paragraph (4) of section 42(g) of 
the Internal Revenue Code of 1986 (relating to certain 
rules made applicable) is amended by striking the period 
at the end and inserting ‘‘and the term ‘area median gross 
income’ means the amount equal to the greater of—
‘‘(A) the area median gross income deter-
mined under section 142(d)(2)(B), or 
‘‘(B) the statewide median gross income 
for the State in which the project is located.’’
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to—
(1) housing credit dollar amounts allocated 
after the date of the enactment of this Act, and
(2) buildings placed in service after such date 
to the extent paragraph (1) of section 42(h) of the 
Internal Revenue Code of 1986 does not apply to 
any building by reason of paragraph (4) thereof.
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