I 
110TH CONGRESS 
1ST SESSION H. R. 2893 
To amend the Internal Revenue Code of 1986 to provide that qualified 
homeowner downpayment assistance is a charitable purpose, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 27, 2007 
Mr. WELDON of Florida 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 provide 
that qualified homeowner downpayment assistance is a 
charitable purpose, 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 ‘‘Homeownership Af-
fordability Act of 2007’’. 
SEC. 2. QUALIFIED HOMEOWNER DOWNPAYMENT ASSIST-
ANCE. 
(a) IN GENERAL.—Section 501 of the Internal Rev-
enue Code of 1986 (relating to exemption of tax on cor-
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porations, certain trusts, etc.) is amended by redesig-
nating subsection (r) as subsection (s) and by inserting 
after subsection (q) the following new subsection: 
‘‘(r) QUALIFIED HOMEOWNER DOWNPAYMENT AS-
SISTANCE.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(c)(3) and sections 170(c)(2), 2055(a)(2), and 
2522(a)(2), the term ‘charitable purposes’ includes 
the provision of qualified homeowner downpayment 
assistance. 
‘‘(2) QUALIFIED HOMEOWNER DOWNPAYMENT 
ASSISTANCE.—For purposes of this subsection, the 
term ‘qualified homeowner downpayment assistance’ 
means a gift of cash for the purpose of providing 
any downpayment for the acquisition of any property 
as a principal residence (within the meaning of sec-
tion 121) for a qualified taxpayer if— 
‘‘(A) with respect to such property, such 
gift does not exceed 20 percent of 110 percent 
of the maximum principal obligation allowable, 
and 
‘‘(B) the purchase price of such property 
does not exceed 110 percent of the maximum 
principal obligation allowable. 
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‘‘(3) MAXIMUM PRINCIPAL OBLIGATION ALLOW-
ABLE.—The maximum principal obligation allowable 
with respect to any property is the maximum prin-
cipal obligation allowable for the area in which such 
property is located, determined under section 
203(b)(2)(A) of the National Housing Act, for a 
loan insured pursuant to such section 203. 
‘‘(4) QUALIFIED TAXPAYER.—For purposes of 
paragraph (2), the term ‘qualified taxpayer’ means 
a taxpayer whose modified adjusted gross income for 
the taxable year in which the downpayment assist-
ance is received does not exceed $110,000 ($220,000 
in the case of a joint return). For purposes of the 
preceding sentence, the term ‘modified adjusted 
gross income’ means adjusted gross income in-
creased by any amount excluded from gross income 
under section 911, 931, or 933.’’. 
(b) NO CHARITABLE DEDUCTION FOR CONTRIBU-
TIONS FOR DOWNPAYMENT ASSISTANCE.—Subsection (f) 
of section 170 of the Internal Revenue Code of 1986 (re-
lating to disallowance of deduction in certain cases and 
special rules) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(19) DENIAL OF DEDUCTION OF CONTRIBU-
TIONS FOR DOWNPAYMENT ASSISTANCE.—No deduc-
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tion shall be allowed under this section for a con-
tribution to an organization which provides home-
owner downpayment assistance if the contribution is 
made directly or indirectly in connection with a 
transaction in which the purchaser of a home re-
ceived downpayment assistance and the contrib-
utor— 
‘‘(A) received the downpayment assistance, 
‘‘(B) sold the home to the purchaser, 
‘‘(C) loaned money to the purchaser, or 
‘‘(D) otherwise received a commission or 
other benefit associated with the transaction.’’. 
(c) EXCLUSION FROM TAXABLE GIFTS.— 
(1) IN
GENERAL.—Paragraph (2) of section 
2503(e) of such Code (relating to exclusion for cer-
tain transfers for educational expenses or medical 
expenses) is amended by striking ‘‘or’’ at the end of 
subparagraph (A), by striking the period at the end 
of subparagraph (B) and inserting ‘‘, or’’, and by in-
serting after subparagraph (B) the following new 
subparagraph: 
‘‘(C) if such payment is qualified home-
owner downpayment assistance (as defined in 
section 501(r)(2)) paid to a lender or the seller 
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of the property on behalf of a donee who is re-
lated to the donor.’’. 
(2) RELATIONSHIP
TEST.—Paragraph (2) of 
section 2503(e) of such Code is amended by adding 
at the end the following flush sentence: 
‘‘For purposes of subparagraph (C), a donee is re-
lated to a donor if the donee bears a relationship to 
the donor described in section 529(e)(2) (other than 
subparagraph (D) thereof).’’. 
(3) CONFORMING AMENDMENT.—The heading 
for section 2503(e) of such Code is amended by 
striking ‘‘EDUCATIONAL EXPENSES
OR MEDICAL 
EXPENSES’’ and inserting ‘‘EDUCATIONAL
EX-
PENSES, MEDICAL EXPENSES, OR DOWNPAYMENT 
ASSISTANCE’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
Æ 
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