I 
111TH CONGRESS 
1ST SESSION H. R. 1903 
To provide incentives for the residential housing market. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 2, 2009 
Mr. CANTOR (for himself, Mr. LEE of New York, Mr. DREIER, Mrs. BIGGERT, 
Mr. BRADY of Texas, Mr. MCCARTHY of California, Mr. CASSIDY, Mr. 
CAMPBELL, Mrs. BONO MACK, Mr. PAULSEN, and Mr. BOUSTANY) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means, and in addition to the Committees on Financial Services and 
the Judiciary, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To provide incentives for the residential housing market. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Responsible Homeowners Act of 2009’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Stopping mortgage fraud. 
Sec. 3. Tax credit for mortgage refinancing. 
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Sec. 4. Tax incentives for voluntary mortgage modifications. 
Sec. 5. Servicer safe harbor for mortgage loan modifications. 
Sec. 6. Credit for certain home purchases. 
Sec. 7. Certain gains on single-family residential rental property excluded from 
gross income. 
SEC. 2. STOPPING MORTGAGE FRAUD. 
(a) PRIORITY OF EFFORTS.—The Secretary of Hous-
ing and Urban Development, the Assistant Secretary for 
Housing—Federal Housing Commissioner of the Depart-
ment of Housing and Urban Development, and the Direc-
tor of the Federal Housing Finance Agency, shall give in-
creased priority to efforts and activities to detect, identify, 
reduce, and report fraud in residential mortgage lending, 
including in the marketing, offering, origination, under-
writing, servicing, and refinancing of residential mort-
gages, and in all other aspects of residential mortgage 
lending. Such efforts and activities shall include increasing 
the number of personnel assigned specifically to mortgage 
fraud detection. 
(b) AUTHORIZATION OF APPROPRIATIONS.—For fis-
cal years 2009, 2010, 2011, 2012, and 2013, there are 
authorized to be appropriated to the Attorney General a 
total of— 
(1) $31,250,000 to support the employment of 
30 additional agents of the Federal Bureau of Inves-
tigation and 2 additional dedicated prosecutors at 
the Department of Justice to coordinate prosecution 
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of mortgage fraud efforts with the offices of the 
United States Attorneys; and 
(2) $750,000 to support the operations of inter-
agency task forces of the Federal Bureau of Inves-
tigation in the areas with the 15 highest concentra-
tions of mortgage fraud. 
SEC. 3. TAX CREDIT FOR MORTGAGE REFINANCING. 
(a) ALLOWANCE OF CREDIT.—Subpart A of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 is amended by inserting after section 25D the fol-
lowing new section: 
‘‘SEC. 25E. CREDIT FOR MORTGAGE REFINANCING. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual who completes a refinancing of a qualified resi-
dential mortgage during the taxable year, there shall be 
allowed as a credit against the tax imposed by this subtitle 
for such taxable year an amount equal to $5,000. 
‘‘(b) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
RESIDENTIAL
MORTGAGE.— 
The term ‘qualified residential mortgage’ means in-
debtedness which is secured by the taxpayer’s prin-
cipal residence (within the meaning of section 121). 
Such term shall not include any indebtedness which 
is secured by a residence which is located outside the 
United States. 
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‘‘(2) REFINANCING.—The term ‘refinancing’ 
means a qualified residential mortgage any portion 
of the proceeds of which are used to satisfy the tax-
payer’s entire obligation under another qualified res-
idential mortgage. 
‘‘(c) COORDINATION WITH HOME BUYER CRED-
ITS.—No credit shall be allowed under this section for any 
taxable year if the taxpayer is allowed a credit under sec-
tion 25F, 36, or 1400C for such taxable year or any prior 
taxable year. No credit shall be allowed under sections 
25F, 36, or 1400C for any taxable year if the taxpayer 
is allowed a credit under this subsection (a) for any prior 
taxable year. 
‘‘(d) EXCEPTION FOR NONRESIDENT ALIEN INDIVID-
UALS.—No credit shall be allowed under subsection (a) to 
any taxpayer if such taxpayer is a nonresident alien indi-
vidual. 
‘‘(e) ELECTION.—A taxpayer may elect to have sub-
section (a) not apply for any taxable year. 
‘‘(f) TERMINATION.—This section shall not apply to 
any refinancing completed after June 30, 2010.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 25D the following new item: 
‘‘Sec. 25E. Credit for mortgage refinancing.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to refinancings completed after the 
date of the enactment of this Act, in taxable years ending 
after such date. 
SEC. 4. TAX INCENTIVES FOR VOLUNTARY MORTGAGE 
MODIFICATIONS. 
(a) EXCLUSION OF QUALIFIED APPRECIATION PAY-
MENTS.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after section 139C the fol-
lowing new section: 
‘‘SEC. 139D. MORTGAGE MODIFICATION INCOME. 
‘‘(a) IN GENERAL.—In the case of a lender who en-
ters into a qualified mortgage workout with a borrower, 
gross income shall not include any qualified appreciation 
payment made pursuant to such workout. 
‘‘(b) QUALIFIED MORTGAGE WORKOUT.—For pur-
poses of this section, the term ‘qualified mortgage work-
out’ means legally binding modifications to a qualified 
mortgage which provide for each of the following: 
‘‘(1) Monthly payments under the mortgage 
which do not exceed 38 percent of the gross monthly 
income of the borrower. 
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‘‘(2) Such modifications shall achieve the re-
quirement of paragraph (1) by means of one or more 
of the following: 
‘‘(A) A reduction in the interest rate of the 
loan. 
‘‘(B) An extension of the term of the loan 
(but not greater than 40 years). 
‘‘(C) A reduction in the principal amount 
of the loan. 
‘‘(3) Provides the lender with a right to a pay-
ment of a share of any appreciation in the value of 
the residence which secures the loan upon the dis-
position of the residence by the borrower. 
‘‘(c) OTHER DEFINITIONS AND SPECIAL RULE.—For 
purposes of this section— 
‘‘(1) QUALIFIED MORTGAGE.—The term ‘quali-
fied mortgage’ means indebtedness— 
‘‘(A) which is secured by a principal resi-
dence (within the meaning of section 121) 
which is located in the United States, and 
‘‘(B) which fails to meet the requirement 
of subsection (b)(1). 
‘‘(2) QUALIFIED
APPRECIATION
PAYMENT.— 
The term ‘qualified appreciation payment’ means the 
payment described in subsection (b)(4). 
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