517 
‘‘(B) the individual has or will acquire a bene-
ficial property interest (as so determined) in such 
housing or residence. 
‘‘(c) REGULATIONS.—Benefits and assistance under 
this chapter by reason of this section shall be provided in 
accordance with such regulations as the Secretary may pre-
scribe.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) REPEAL OF SUPERSEDED AUTHORITY.—Sec-
tion 2101 of title 38, United States Code, is amend-
ed— 
(A) by striking subsection (c); and 
(B) by redesignating subsection (d) as sub-
section (c). 
(2) LIMITATIONS ON ASSISTANCE.—Section 2102 
of title 38, United States Code, is amended— 
(A) in subsection (a)— 
(i) by striking ‘‘veteran’’ each place it 
appears and inserting ‘‘individual’’; and 
(ii) in paragraph (3), by striking ‘‘vet-
eran’s’’ and inserting ‘‘individual’s’’; 
(B) in subsection (b)(1), by striking ‘‘a vet-
eran’’ and inserting ‘‘an individual’’; 
(C) in subsection (c)—
518 
(i) by striking ‘‘a veteran’’ and insert-
ing ‘‘an individual’’; and 
(ii) by striking ‘‘the veteran’’ each 
place it appears and inserting ‘‘the indi-
vidual’’; and 
(D) in subsection (d), by striking ‘‘a vet-
eran’’ each place it appears and inserting ‘‘an 
individual’’. 
(3) ASSISTANCE FOR INDIVIDUALS TEMPORARILY 
RESIDING IN HOUSING OF FAMILY MEMBER.—Section 
2102A of title 38, United States Code, is amended— 
(A) by striking ‘‘veteran’’ each place it ap-
pears (other than in subsection (b)) and insert-
ing ‘‘individual’’; 
(B) in subsection (a), by striking ‘‘vet-
eran’s’’ each place it appears and inserting ‘‘in-
dividual’s’’; and 
(C) in subsection (b), by striking ‘‘a vet-
eran’’ each place it appears and inserting ‘‘an 
individual’’. 
(4) FURNISHING
OF
PLANS
AND
SPECIFICA-
TIONS.—Section 2103 of title 38, United States Code, 
is amended by striking ‘‘veterans’’ both places it ap-
pears and inserting ‘‘individuals’’.
519 
(5) CONSTRUCTION OF BENEFITS.—Section 2104 
of title 38, United States Code, is amended— 
(A) in subsection (a), by striking ‘‘veteran’’ 
each place it appears and inserting ‘‘indi-
vidual’’; and 
(B) in subsection (b)— 
(i) in the first sentence, by striking ‘‘A 
veteran’’ and inserting ‘‘An individual’’; 
(ii) in the second sentence, by striking 
‘‘a veteran’’ and inserting ‘‘an individual’’; 
and 
(iii) by striking ‘‘such veteran’’ each 
place it appears and inserting ‘‘such indi-
vidual’’. 
(6) VETERANS’ MORTGAGE LIFE INSURANCE.— 
Section 2106 of title 38, United States Code, is 
amended— 
(A) in subsection (a)— 
(i) by striking ‘‘any eligible veteran’’ 
and inserting ‘‘any eligible individual’’; 
and 
(ii) by striking ‘‘the veterans’ ’’ and in-
serting ‘‘the individual’s’’;
520 
(B) in subsection (b), by striking ‘‘an eligi-
ble veteran’’ and inserting ‘‘an eligible indi-
vidual’’; 
(C) in subsection (e), by striking ‘‘an eligi-
ble veteran’’ and inserting ‘‘an individual’’; 
(D) in subsection (h), by striking ‘‘each vet-
eran’’ and inserting ‘‘each individual’’; 
(E) in subsection (i), by striking ‘‘the vet-
eran’s’’ each place it appears and inserting ‘‘the 
individual’s’’; 
(F) by striking ‘‘the veteran’’ each place it 
appears and inserting ‘‘the individual’’; and 
(G) by striking ‘‘a veteran’’ each place it 
appears and inserting ‘‘an individual’’. 
(7) HEADING AMENDMENTS.—(A) The heading of 
section 2101 of title 38, United States Code, is 
amended to read as follows: 
‘‘§ 2101. Acquisition and adaptation of housing: eligi-
ble veterans’’. 
(B) The heading of section 2102A of such title is 
amended to read as follows:
521 
‘‘§ 2102A. Assistance for individuals residing tempo-
rarily in housing owned by a family mem-
ber’’. 
(8) CLERICAL AMENDMENTS.—The table of sec-
tions at the beginning of chapter 21 of title 38, 
United States Code, is amended— 
(A) by striking the item relating to section 
2101 and inserting the following new item: 
‘‘2101. Acquisition and adaptation of housing: eligible veterans.’’; 
(B) by inserting after the item relating to 
section 2101, as so amended, the following new 
item: 
‘‘2101A. Eligibility for benefits and assistance: members of the Armed Forces with 
service-connected disabilities; individuals residing outside the 
United States.’’; 
and 
(C) by striking the item relating to section 
2102A and inserting the following new item: 
‘‘2102A. Assistance for individuals residing temporarily in housing owned by a 
family member.’’. 
SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
INDIVIDUALS WITH SEVERE BURN INJURIES. 
Section 2101 of title 38, United States Code, is amend-
ed— 
(1) in subsection (a)(2), by adding at the end the 
following new subparagraph:
530 
section (f)(5), regarding any changes to the 
goals, objectives, and policies of that agency. 
‘‘(B) APPLICABILITY OF WAIVER AUTHOR-
ITY.—Paragraph (3) shall apply to qualified 
public housing agencies, except that for purposes 
of such qualified public housing agencies, sub-
paragraph (B) of such paragraph shall be ap-
plied by substituting ‘the functions described in 
the second sentence of paragraph (4)(A)’ for ‘the 
functions described in paragraph (2)’. 
‘‘(f) PUBLIC HEARINGS.—’’; and 
(2) in subsection (f) (as so designated by the 
amendment made by paragraph (1)), by adding at 
the end the following: 
‘‘(5) QUALIFIED PUBLIC HOUSING AGENCIES.— 
‘‘(A) REQUIREMENT.—Notwithstanding that 
qualified public housing agencies are exempt 
under subsection (b)(3)(A) from the requirement 
under this section to conduct a public hearing 
regarding the annual public housing plan of the 
agency, each qualified public housing agency 
shall annually conduct a public hearing— 
‘‘(i) to discuss any changes to the 
goals, objectives, and policies of the agency; 
and
531 
‘‘(ii) to invite public comment regard-
ing such changes. 
‘‘(B) AVAILABILITY
OF
INFORMATION
AND 
NOTICE.—Not later than 45 days before the date 
of any hearing described in subparagraph (A), a 
qualified public housing agency shall— 
‘‘(i) make all information relevant to 
the hearing and any determinations of the 
agency regarding changes to the goals, objec-
tives, and policies of the agency to be con-
sidered at the hearing available for inspec-
tion by the public at the principal office of 
the public housing agency during normal 
business hours; and 
‘‘(ii) publish a notice informing the 
public that— 
‘‘(I) the information is available 
as required under clause (i); and 
‘‘(II) a public hearing under sub-
paragraph (A) will be conducted.’’. 
TITLE VIII—FORECLOSURE 
RESCUE FRAUD PROTECTION 
SEC. 2801. SHORT TITLE. 
This title may be cited as the ‘‘Foreclosure Rescue 
Fraud Act of 2008’’.
532 
SEC. 2802. DEFINITIONS. 
In this title: 
(1) 
COMMISSION.—The 
term 
‘‘Commission’’ 
means the Federal Trade Commission. 
(2) 
FORECLOSURE
CONSULTANT.—The 
term 
‘‘foreclosure consultant’’— 
(A) means a person who makes any solicita-
tion, representation, or offer to a homeowner fac-
ing foreclosure on residential real property to 
perform, for gain, or who performs, for gain, any 
service that such person represents will prevent, 
postpone, or reverse the effect of such foreclosure; 
and 
(B) does not include— 
(i) an attorney licensed to practice law 
in the State in which the property is located 
who has established an attorney-client rela-
tionship with the homeowner; 
(ii) a person licensed as a real estate 
broker or salesperson in the State where the 
property is located, and such person engages 
in acts permitted under the licensure laws 
of such State; 
(iii) a housing counseling agency ap-
proved by the Secretary;
533 
(iv) a depository institution (as de-
fined in section 3 of the Federal Deposit In-
surance Act (12 U.S.C. 1813)); 
(v) a Federal credit union or a State 
credit union (as defined in section 101 of 
the Federal Credit Union Act (12 U.S.C. 
1752)); or 
(vi) an insurance company organized 
under the laws of any State. 
(3) HOMEOWNER.—The term ‘‘homeowner’’, with 
respect to residential real property for which an ac-
tion to foreclose on the mortgage or deed of trust on 
such real property is filed, means the person holding 
record title to such property as of the date on which 
such action is filed. 
(4) LOAN SERVICER.—The term ‘‘loan servicer’’ 
has the same meaning as the term ‘‘servicer’’ in sec-
tion 6(i)(2) of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2605(i)(2)). 
(5) RESIDENTIAL MORTGAGE LOAN.—The term 
‘‘residential mortgage loan’’ means any loan pri-
marily for personal, family, or household use that is 
secured by a mortgage, deed of trust, or other equiva-
lent consensual security interest on a dwelling (as de-
fined in section 103(v) of the Truth in Lending Act
534 
(15 U.S.C. 1602)(v)) or residential real estate upon 
which is constructed or intended to be constructed a 
dwelling (as so defined). 
(6) RESIDENTIAL
REAL
PROPERTY.—The term 
‘‘residential real property’’ has the meaning given the 
term ‘‘dwelling’’ in section 103 of the Consumer Cred-
it Protection Act (15 U.S.C. 1602). 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
SEC. 2803. MORTGAGE RESCUE FRAUD PROTECTION. 
(a) LIMITS ON FORECLOSURE CONSULTANTS.—A fore-
closure consultant may not— 
(1) claim, demand, charge, collect, or receive any 
compensation from a homeowner for services per-
formed by such foreclosure consultant with respect to 
residential real property until such foreclosure con-
sultant has fully performed each service that such 
foreclosure consultant contracted to perform or rep-
resented would be performed with respect to such resi-
dential real property; 
(2) hold any power of attorney from any home-
owner, except to inspect documents, as provided by 
applicable law; 
(3) receive any consideration from a third party 
in connection with services rendered to a homeowner
535 
by such third party with respect to the foreclosure of 
residential real property, unless such consideration is 
fully disclosed, in a clear and conspicuous manner, to 
such homeowner in writing before such services are 
rendered; 
(4) accept any wage assignment, any lien of any 
type on real or personal property, or other security 
to secure the payment of compensation with respect to 
services provided by such foreclosure consultant in 
connection with the foreclosure of residential real 
property; or 
(5) acquire any interest, directly or indirectly, 
in the residence of a homeowner with whom the fore-
closure consultant has contracted. 
(b) CONTRACT REQUIREMENTS.— 
(1) WRITTEN
CONTRACT
REQUIRED.—Notwith-
standing any other provision of law, a foreclosure 
consultant may not provide to a homeowner a service 
related to the foreclosure of residential real prop-
erty— 
(A) unless— 
(i) a written contract for the purchase 
of such service has been signed and dated by 
the homeowner; and
536 
(ii) such contract complies with the re-
quirements described in paragraph (2); and 
(B) before the end of the 3-business-day pe-
riod beginning on the date on which the contract 
is signed. 
(2) TERMS AND CONDITIONS OF CONTRACT.—The 
requirements described in this paragraph, with re-
spect to a contract, are as follows: 
(A) The contract includes, in writing— 
(i) a full and detailed description of 
the exact nature of the contract and the 
total amount and terms of compensation; 
(ii) the name, physical address, phone 
number, email address, and facsimile num-
ber, if any, of the foreclosure consultant to 
whom a notice of cancellation can be mailed 
or sent under subsection (d); and 
(iii) a conspicuous statement in at 
least 12 point bold face type in immediate 
proximity to the space reserved for the 
homeowner’s signature on the contract that 
reads as follows: ‘‘You may cancel this con-
tract without penalty or obligation at any 
time before midnight of the 3rd business 
day after the date on which you sign the
537 
contract. See the attached notice of cancella-
tion form for an explanation of this right.’’. 
(B) The contract is written in the principal 
language used to solicit or market the services to 
the homeowner. 
(C) The contract is accompanied by the 
form required by subsection (c)(2). 
(c) RIGHT TO CANCEL CONTRACT.— 
(1) IN GENERAL.—With respect to a contract be-
tween a homeowner and a foreclosure consultant re-
garding the foreclosure on the residential real prop-
erty of such homeowner, such homeowner may cancel 
such contract without penalty or obligation by mail-
ing a notice of cancellation not later than midnight 
of the 3rd business day after the date on which such 
contract is executed or would become enforceable 
against the parties to such contract. 
(2) CANCELLATION FORM AND OTHER INFORMA-
TION.—Each contract described in paragraph (1) 
shall be accompanied by a form, in duplicate, that— 
(A) has the heading ‘‘Notice of Cancella-
tion’’ in boldface type; and 
(B) contains in boldface type the following 
statement:
538 
‘‘You may cancel this contract, without any pen-
alty or obligation, at any time before midnight of the 
3rd day after the date on which the contract is signed 
by you. 
‘‘To cancel this contract, mail or deliver a signed 
and dated copy of this cancellation notice or any 
other equivalent written notice to [insert name of 
foreclosure consultant] at [insert address of foreclosure 
consultant] before midnight on [insert date]. 
‘‘I hereby cancel this transaction on [insert date] 
[insert homeowner signature].’’. 
(d) WAIVER OF RIGHTS AND PROTECTIONS PROHIB-
ITED.— 
(1) IN GENERAL.—A waiver by a homeowner of 
any protection provided by this section or any right 
of a homeowner under this section— 
(A) shall be treated as void; and 
(B) may not be enforced by any Federal or 
State court or by any person. 
(2) ATTEMPT TO OBTAIN A WAIVER.—Any at-
tempt by any person to obtain a waiver from any 
homeowner of any protection provided by this section 
or any right of the homeowner under this section shall 
be treated as a violation of this section.
539 
(3) CONTRACTS NOT IN COMPLIANCE.—Any con-
tract that does not comply with the applicable provi-
sions of this title shall be void and may not be en-
forceable by any party. 
SEC. 2804. WARNINGS TO HOMEOWNERS OF FORECLOSURE 
RESCUE SCAMS. 
(a) IN GENERAL.—If a loan servicer finds that a 
homeowner has failed to make 2 consecutive payments on 
a residential mortgage loan and such loan is at risk of being 
foreclosed upon, the loan servicer shall notify such home-
owner of the dangers of fraudulent activities associated with 
foreclosure. 
(b) NOTICE REQUIREMENTS.—Each notice provided 
under subsection (a) shall— 
(1) be in writing; 
(2) be included with a mailing of account infor-
mation; 
(3) have the heading ‘‘Notice Required by Fed-
eral Law’’ in a 14-point boldface type in English and 
Spanish at the top of such notice; and 
(4) contain the following statement in English 
and Spanish: ‘‘Mortgage foreclosure is a complex 
process. Some people may approach you about saving 
your home. You should be careful about any such 
promises. There are government and nonprofit agen-
540 
cies you may contact for helpful information about 
the foreclosure process. Contact your lender imme-
diately at [llll], call the Department of Hous-
ing and Urban Development Housing Counseling 
Line at (800) 569–4287 to find a housing counseling 
agency certified by the Department to assist you in 
avoiding foreclosure, or visit the Department’s Tips 
for 
Avoiding 
Foreclosure 
website 
at 
http:// 
www.hud.gov/foreclosure for additional assistance.’’ 
(the blank space to be filled in by the loan servicer 
and successor telephone numbers and Uniform Re-
source Locators (URLs) for the Department of Hous-
ing and Urban Development Housing Counseling 
Line and Tips for Avoiding Foreclosure website, re-
spectively). 
SEC. 2805. CIVIL LIABILITY. 
(a) IN GENERAL.—Any foreclosure consultant who 
fails to comply with any provision of section 2803 or 2804 
with respect to any other person shall be liable to such per-
son in an amount equal to the greater of— 
(1) the amount of any actual damage sustained 
by such person as a result of such failure; or 
(2) any amount paid by the person to the fore-
closure consultant.
552 
waive paragraph (2)(B)(ii) with respect to any 
building acquired from an insured depository in-
stitution in default (as defined in section 3 of the 
Federal Deposit Insurance Act) or from a re-
ceiver or conservator of such an institution. 
‘‘(C) 
FEDERALLY- 
OR
STATE-ASSISTED 
BUILDING.—For purposes of this paragraph— 
‘‘(i) 
FEDERALLY-ASSISTED
BUILD-
ING.—The term ‘Federally-assisted building’ 
means any building which is substantially 
assisted, financed, or operated under section 
8 of the United States Housing Act of 1937, 
section 221(d)(3), 221(d)(4), or 236 of the 
National Housing Act, or section 515 of the 
Housing Act of 1949 (as such Acts are in 
effect on the date of the enactment of the 
Tax Reform Act of 1986). 
‘‘(ii) STATE-ASSISTED BUILDING.—The 
term ‘State-assisted building’ means any 
building which is substantially assisted, fi-
nanced, or operated under any State law 
similar in purposes to any of the laws re-
ferred to in clause (i).’’. 
(g) REPEAL OF DEADWOOD.—
553 
(1) Clause (ii) of section 42(d)(2)(B) is amended 
by striking ‘‘the later of—’’ and all that follows and 
inserting ‘‘the date the building was last placed in 
service,’’. 
(2) Subparagraph (D) of section 42(d)(2) is 
amended by striking clause (i) and by redesignating 
clauses (ii) and (iii) as clauses (i) and (ii), respec-
tively. 
(3) Paragraph (5) of section 42(d) is amended 
by striking subparagraph (B) and by redesignating 
subparagraph (C) as subparagraph (B). 
(h) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in paragraph (2), the amendments made by this sub-
section shall apply to buildings placed in service after 
the date of the enactment of this Act. 
(2) REHABILITATION REQUIREMENTS.— 
(A) IN GENERAL.—The amendments made 
by subsection (b) shall apply with respect to 
housing credit dollar amounts allocated after the 
date of the enactment of this Act. 
(B) BUILDINGS NOT SUBJECT TO ALLOCA-
TION LIMITS.—To the extent paragraph (1) of 
section 42(h) of the Internal Revenue Code of 
1986 does not apply to any building by reason
554 
of paragraph (4) thereof, the amendments made 
by subsection (b) shall apply to buildings placed 
in service after the date of the enactment of this 
Act. 
SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW- 
INCOME HOUSING TAX INCENTIVES. 
(a) REPEAL PROHIBITION ON MODERATE REHABILI-
TATION ASSISTANCE.—Paragraph (2) of section 42(c) (de-
fining qualified low-income building) is amended by strik-
ing the flush sentence at the end. 
(b) MODIFICATION OF TIME LIMIT FOR INCURRING 10 
PERCENT
OF PROJECT’S COST.—Clause (ii) of section 
42(h)(1)(E) is amended by striking ‘‘(as of the later of the 
date which is 6 months after the date that the allocation 
was made or the close of the calendar year in which the 
allocation is made)’’ and inserting ‘‘(as of the date which 
is 1 year after the date that the allocation was made)’’. 
(c) REPEAL OF BONDING REQUIREMENT ON DISPOSI-
TION OF BUILDING.—Paragraph (6) of section 42(j) (relat-
ing to no recapture on disposition of building (or interest 
therein) where bond posted) is amended to read as follows: 
‘‘(6) NO RECAPTURE ON DISPOSITION OF BUILD-
ING WHICH CONTINUES IN QUALIFIED USE.— 
‘‘(A) IN
GENERAL.—The increase in tax 
under this subsection shall not apply solely by
555 
reason of the disposition of a building (or an in-
terest therein) if it is reasonably expected that 
such building will continue to be operated as a 
qualified low-income building for the remaining 
compliance period with respect to such building. 
‘‘(B) STATUTE
OF
LIMITATIONS.—If a 
building (or an interest therein) is disposed of 
during any taxable year and there is any reduc-
tion in the qualified basis of such building which 
results in an increase in tax under this sub-
section for such taxable or any subsequent tax-
able year, then— 
‘‘(i) the statutory period for the assess-
ment of any deficiency with respect to such 
increase in tax shall not expire before the 
expiration of 3 years from the date the Sec-
retary is notified by the taxpayer (in such 
manner as the Secretary may prescribe) of 
such reduction in qualified basis, and 
‘‘(ii) such deficiency may be assessed 
before the expiration of such 3-year period 
notwithstanding the provisions of any other 
law or rule of law which would otherwise 
prevent such assessment.’’.
556 
(d) ENERGY EFFICIENCY
AND HISTORIC NATURE 
TAKEN INTO ACCOUNT IN MAKING ALLOCATIONS.—Sub-
paragraph (C) of section 42(m)(1) (relating to plans for 
allocation of credit among projects) is amended by striking 
‘‘and’’ at the end of clause (vii), by striking the period at 
the end of clause (viii) and inserting a comma, and by add-
ing at the end the following new clauses: 
‘‘(ix) the energy efficiency of the 
project, and 
‘‘(x) the historic nature of the project.’’. 
(e) CONTINUED ELIGIBILITY FOR STUDENTS WHO RE-
CEIVED FOSTER CARE ASSISTANCE.—Clause (i) of section 
42(i)(3)(D) is amended by striking ‘‘or’’ at the end of sub-
clause (I), by redesignating subclause (II) as subclause 
(III), and by inserting after subclause (I) the following new 
subclause: 
‘‘(II) a student who was pre-
viously under the care and placement 
responsibility of the State agency re-
sponsible for administering a plan 
under part B or part E of title IV of 
the Social Security Act, or’’. 
(f) TREATMENT OF RURAL PROJECTS.—Section 42(i) 
(relating to definitions and special rules) is amended by 
adding at the end the following new paragraph:
557 
‘‘(8) TREATMENT
OF
RURAL
PROJECTS.—For 
purposes of this section, in the case of any project for 
residential rental property located in a rural area (as 
defined in section 520 of the Housing Act of 1949), 
any income limitation measured by reference to area 
median gross income shall be measured by reference 
to the greater of area median gross income or na-
tional non-metropolitan median income. The pre-
ceding sentence shall not apply with respect to any 
building if paragraph (1) of section 42(h) does not 
apply by reason of paragraph (4) thereof to any por-
tion of the credit determined under this section with 
respect to such building.’’. 
(g) CLARIFICATION OF GENERAL PUBLIC USE RE-
QUIREMENT.—Subsection (c) of section 42 is amended by 
adding at the end the following new paragraph: 
‘‘(3) CLARIFICATION OF GENERAL PUBLIC USE 
REQUIREMENT.— 
‘‘(A) IN GENERAL.—A building which meets 
the requirements of subparagraph (B) shall not 
fail to be treated as a qualified low-income 
building solely because occupancy in such build-
ing is restricted to individuals who have special 
needs, share a common occupation or common 
interests, or are members of a specified group
562 
number of members of the Armed Forces of 
the United States assigned to which, as of 
June 1, 2008, is not less than 1,000.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to— 
(1) determinations made after the date of the en-
actment of this Act and before January 1, 2012, in 
the case of any qualified building (as defined in sec-
tion 142(d)(2)(B)(iii) of the Internal Revenue Code of 
1986)— 
(A) with respect to which housing credit 
dollar amounts have been allocated before the 
date of the enactment of this Act, or 
(B) with respect to buildings placed in serv-
ice before such date of enactment, to the extent 
paragraph (1) of section 42(h) of such Code does 
not apply to such building by reason of para-
graph (4) thereof, but only with respect to bonds 
issued before such date of enactment, and 
(2) determinations made after the date of enact-
ment of this Act, in the case of qualified buildings (as 
so defined)— 
(A) with respect to which housing credit 
dollar amounts are allocated after the date of the
563 
enactment of this Act and before January 1, 
2012, or 
(B) with respect to which buildings placed 
in service after the date of enactment of this Act 
and before January 1, 2012, to the extent para-
graph (1) of section 42(h) of such Code does not 
apply to such building by reason of paragraph 
(4) thereof, but only with respect to bonds issued 
after such date of enactment and before January 
1, 2012. 
PART II—MODIFICATIONS TO TAX-EXEMPT 
HOUSING BOND RULES 
SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANC-
ING RESIDENTIAL RENTAL PROJECTS. 
(a) IN GENERAL.—Subsection (i) of section 146 (relat-
ing to treatment of refunding issues) is amended by adding 
at the end the following new paragraph: 
‘‘(6) TREATMENT
OF
CERTAIN
RESIDENTIAL 
RENTAL PROJECT BONDS AS REFUNDING BONDS IRRE-
SPECTIVE OF OBLIGOR.— 
‘‘(A) IN GENERAL.—If, during the 6-month 
period beginning on the date of a repayment of 
a loan financed by an issue 95 percent or more 
of the net proceeds of which are used to provide 
projects described in section 142(d), such repay-
564 
ment is used to provide a new loan for any 
project so described, any bond which is issued to 
refinance such issue shall be treated as a refund-
ing issue to the extent the principal amount of 
such refunding issue does not exceed the prin-
cipal amount of the bonds refunded. 
‘‘(B) 
LIMITATIONS.—Subparagraph 
(A) 
shall apply to only one refunding of the original 
issue and only if— 
‘‘(i) the refunding issue is issued not 
later than 4 years after the date on which 
the original issue was issued, 
‘‘(ii) the latest maturity date of any 
bond of the refunding issue is not later than 
34 years after the date on which the re-
funded bond was issued, and 
‘‘(iii) the refunding issue is approved 
in accordance with section 147(f) before the 
issuance of the refunding issue.’’. 
(b) LOW-INCOME HOUSING CREDIT.—Clause (ii) of 
section 42(h)(4)(A) is amended by inserting ‘‘or such fi-
nancing is refunded as described in section 146(i)(6)’’ before 
the period at the end.
565 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to repayments of loans received after the 
date of the enactment of this Act. 
SEC. 3008. COORDINATION OF CERTAIN RULES APPLICABLE 
TO 
LOW-INCOME 
HOUSING 
CREDIT 
AND 
QUALIFIED RESIDENTIAL RENTAL PROJECT 
EXEMPT FACILITY BONDS. 
(a) DETERMINATION OF NEXT AVAILABLE UNIT.— 
Paragraph (3) of section 142(d) (relating to current income 
determinations) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) EXCEPTION FOR PROJECTS WITH RE-
SPECT TO WHICH AFFORDABLE HOUSING CREDIT 
IS ALLOWED.—In the case of a project with re-
spect to which credit is allowed under section 42, 
the second sentence of subparagraph (B) shall be 
applied by substituting ‘building (within the 
meaning of section 42)’ for ‘project’.’’. 
(b) STUDENTS.—Paragraph (2) of section 142(d) (re-
lating to definitions and special rules) is amended by add-
ing at the end the following new subparagraph: 
‘‘(C) STUDENTS.—Rules similar to the rules 
of 42(i)(3)(D) shall apply for purposes of this 
subsection.’’.
566 
(c) SINGLE-ROOM OCCUPANCY UNITS.—Paragraph (2) 
of section 142(d) (relating to definitions and special rules), 
as amended by subsection (b), is amended by adding at the 
end the following new subparagraph: 
‘‘(D) SINGLE-ROOM OCCUPANCY UNITS.—A 
unit shall not fail to be treated as a residential 
unit merely because such unit is a single-room 
occupancy unit (within the meaning of section 
42).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to determinations of the status of quali-
fied residential rental projects for periods beginning after 
the date of the enactment of this Act, with respect to bonds 
issued before, on, or after such date. 
PART III—REFORMS RELATED TO THE LOW-IN-
COME HOUSING CREDIT AND TAX-EXEMPT 
HOUSING BONDS 
SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA ME-
DIAN GROSS INCOME. 
(a) IN GENERAL.—Paragraph (2) of section 142(d), as 
amended by section 3008, is amended by adding at the end 
the following new subparagraph: 
‘‘(E) HOLD HARMLESS FOR REDUCTIONS IN 
AREA MEDIAN GROSS INCOME.—
567 
‘‘(i) IN GENERAL.—Any determination 
of area median gross income under sub-
paragraph (B) with respect to any project 
for any calendar year after 2008 shall not 
be less than the area median gross income 
determined under such subparagraph with 
respect to such project for the calendar year 
preceding the calendar year for which such 
determination is made. 
‘‘(ii) SPECIAL RULE FOR CERTAIN CEN-
SUS CHANGES.—In the case of a HUD hold 
harmless impacted project, the area median 
gross income with respect to such project for 
any calendar year after 2008 (hereafter in 
this clause referred to as the current cal-
endar year) shall be the greater of the 
amount determined without regard to this 
clause or the sum of— 
‘‘(I) the area median gross income 
determined under the HUD hold harm-
less policy with respect to such project 
for calendar year 2008, plus 
‘‘(II) any increase in the area me-
dian gross income determined under 
subparagraph (B) (determined without
568 
regard to the HUD hold harmless pol-
icy and this subparagraph) with re-
spect to such project for the current 
calendar year over the area median 
gross income (as so determined) with 
respect to such project for calendar 
year 2008. 
‘‘(iii) HUD HOLD
HARMLESS
POL-
ICY.—The term ‘HUD hold harmless policy’ 
means the regulations under which a policy 
similar to the rules of clause (i) applied to 
prevent a change in the method of deter-
mining area median gross income from re-
sulting in a reduction in the area median 
gross income determined with respect to cer-
tain projects in calendar years 2007 and 
2008. 
‘‘(iv) HUD 
HOLD
HARMLESS
IM-
PACTED
PROJECT.—The term ‘HUD hold 
harmless impacted project’ means any 
project with respect to which area median 
gross income was determined under sub-
paragraph (B) for calendar year 2007 or 
2008 if such determination would have been 
less but for the HUD hold harmless policy.’’.
569 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to determinations of area median gross 
income for calendar years after 2008. 
SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DE-
TERMINATION REQUIREMENT WHERE DETER-
MINATION NOT RELEVANT. 
(a) IN
GENERAL.—Subparagraph (A) of section 
142(d)(3) is amended by adding at the end the following 
new sentence: ‘‘The preceding sentence shall not apply with 
respect to any project for any year if during such year no 
residential unit in the project is occupied by a new resident 
whose income exceeds the applicable income limit.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to years ending after the date of the en-
actment of this Act. 
Subtitle B—Single Family Housing 
SEC. 3011. FIRST-TIME HOMEBUYER CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of subchapter 
A of chapter 1 is amended by redesignating section 36 as 
section 37 and by inserting after section 35 the following 
new section: 
‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual who is a first-time homebuyer of a principal resi-
dence in the United States during a taxable year, there shall
570 
be allowed as a credit against the tax imposed by this sub-
title for such taxable year an amount equal to 10 percent 
of the purchase price of the residence. 
‘‘(b) LIMITATIONS.— 
‘‘(1) DOLLAR LIMITATION.— 
‘‘(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the credit allowed 
under subsection (a) shall not exceed $8,000. 
‘‘(B) MARRIED INDIVIDUALS FILING SEPA-
RATELY.—In the case of a married individual 
filing a separate return, subparagraph (A) shall 
be applied by substituting ‘$4,000’ for ‘$8,000’. 
‘‘(C) OTHER INDIVIDUALS.—If two or more 
individuals who are not married purchase a 
principal residence, the amount of the credit al-
lowed under subsection (a) shall be allocated 
among such individuals in such manner as the 
Secretary may prescribe, except that the total 
amount of the credits allowed to all such individ-
uals shall not exceed $8,000. 
‘‘(2) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a credit under subsection (a) (determined 
without regard to this paragraph) for the taxable
571 
year shall be reduced (but not below zero) by the 
amount which bears the same ratio to the 
amount which is so allowable as— 
‘‘(i) the excess (if any) of— 
‘‘(I) the taxpayer’s modified ad-
justed gross income for such taxable 
year, over 
‘‘(II) $75,000 ($150,000 in the 
case of a joint return), bears to 
‘‘(ii) $20,000. 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A), the 
term ‘modified adjusted gross income’ means the 
adjusted gross income of the taxpayer for the tax-
able year increased by any amount excluded 
from gross income under section 911, 931, or 
933. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) FIRST-TIME HOMEBUYER.—The term ‘first- 
time homebuyer’ means any individual if such indi-
vidual (and if married, such individual’s spouse) had 
no present ownership interest in a principal residence 
during the 3-year period ending on the date of the 
purchase of the principal residence to which this sec-
tion applies.