I 
110TH CONGRESS 
2D SESSION 
H. R. 5720 
To amend the Internal Revenue Code of 1986 to provide assistance for 
housing. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 8, 2008 
Mr. RANGEL (for himself, Mr. MCDERMOTT, Mr. LEWIS of Georgia, Mr. POM-
EROY, Mr. THOMPSON of California, Mr. EMANUEL, Mr. BLUMENAUER, 
Ms. BERKLEY, Mr. CROWLEY, Mr. ELLISON, Ms. GIFFORDS, Mr. JOHN-
SON of Georgia, Mr. MAHONEY of Florida, Mr. RODRIGUEZ, Ms. SHEA- 
PORTER, Mr. SIRES, Mr. WELCH of Vermont, and Mrs. JONES of Ohio) 
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 
assistance for housing. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Housing Assistance Tax Act of 2008’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—HOUSING TAX INCENTIVES 
Subtitle A—Multi-Family Housing 
PART 1—LOW-INCOME HOUSING TAX CREDIT 
Sec. 101. Temporary increase in volume cap for low-income housing tax credit. 
Sec. 102. Determination of credit rate. 
Sec. 103. Modifications to definition of eligible basis. 
Sec. 104. Other simplification and reform of low-income housing tax incentives. 
PART 2—MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES 
Sec. 111. Recycling of tax-exempt debt for financing residential rental projects. 
Sec. 112. Coordination of certain rules applicable to low-income housing credit 
and qualified residential rental project exempt facility bonds. 
PART 3—REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND 
TAX-EXEMPT HOUSING BONDS 
Sec. 121. Hold harmless for reductions in area median gross income. 
Sec. 122. Exception to annual current income determination requirement where 
determination not relevant. 
Subtitle B—Single Family Housing 
Sec. 131. First-time homebuyer credit. 
Sec. 132. Additional standard deduction for real property taxes for non-
itemizers. 
Subtitle C—General Provisions 
Sec. 141. Temporary liberalization of tax-exempt housing bond rules. 
Sec. 142. Repeal of alternative minimum tax limitations on tax-exempt housing 
bonds, low-income housing tax credit, and rehabilitation credit. 
Sec. 143. Bonds guaranteed by Federal home loan banks eligible for treatment 
as tax-exempt bonds. 
Sec. 144. Modification of rules pertaining to FIRPTA nonforeign affidavits. 
Sec. 145. Modification of definition of tax-exempt use property for purposes of 
the rehabilitation credit. 
TITLE II—REFORMS RELATED TO REAL ESTATE INVESTMENT 
TRUSTS 
Subtitle A—Foreign Currency and Other Qualified Activities 
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Sec. 201. Revisions to REIT income tests. 
Sec. 202. Revisions to REIT asset tests. 
Sec. 203. Conforming foreign currency revisions. 
Subtitle B—Taxable REIT Subsidiaries 
Sec. 211. Conforming taxable REIT subsidiary asset test. 
Subtitle C—Dealer Sales 
Sec. 221. Holding period under safe harbor. 
Sec. 222. Determining value of sales under safe harbor. 
Subtitle D—Health Care REITs 
Sec. 231. Conformity for health care facilities. 
Subtitle E—Effective Dates 
Sec. 241. Effective dates. 
TITLE III—REVENUE PROVISIONS 
Sec. 301. Broker reporting of customer’s basis in securities transactions. 
Sec. 302. Delay in application of worldwide allocation of interest. 
Sec. 303. Time for payment of corporate estimated taxes. 
TITLE I—HOUSING TAX 
INCENTIVES 
Subtitle A—Multi-Family Housing 
PART 1—LOW-INCOME HOUSING TAX CREDIT 
SEC. 101. TEMPORARY INCREASE IN VOLUME CAP FOR 
LOW-INCOME HOUSING TAX CREDIT. 
Paragraph (3) of section 42(h) is amended by adding 
at the end the following new subparagraph: 
‘‘(I) INCREASE IN STATE HOUSING CREDIT 
CEILING FOR 2008 AND 2009.—In the case of 
calendar years 2008 and 2009, the dollar 
amount in effect under subparagraph (C)(ii)(I) 
for such calendar year (after any increase under 
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subparagraph (H)) shall be increased by 
$0.20.’’. 
SEC. 102. DETERMINATION OF CREDIT RATE. 
(a) ELIMINATION OF DISTINCTION BETWEEN NEW 
AND EXISTING BUILDINGS; MINIMUM CREDIT RATE FOR 
NON-FEDERALLY SUBSIDIZED BUILDINGS.— 
(1) IN GENERAL.—Subsection (b) section 42 is 
amended to read as follows: 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘applicable per-
centage’ means, with respect to any building, the ap-
propriate percentage prescribed by the Secretary for 
the earlier of— 
‘‘(A) the month in which such building is 
placed in service, or 
‘‘(B) at the election of the taxpayer— 
‘‘(i) the month in which the taxpayer 
and the housing credit agency enter into 
an agreement with respect to such building 
(which is binding on such agency, the tax-
payer, and all successors in interest) as to 
the housing credit dollar amount to be allo-
cated to such building, or 
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‘‘(ii) in the case of any building to 
which subsection (h)(4)(B) applies, the 
month in which the tax-exempt obligations 
are issued. 
A month may be elected under clause (ii) only if the 
election is made not later than the 5th day after the 
close of such month. Such an election, once made, 
shall be irrevocable. 
‘‘(2) METHOD
OF
PRESCRIBING
PERCENT-
AGES.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the percentages prescribed by the 
Secretary for any month shall be— 
‘‘(i) in the case of any building which 
is not federally subsidized for the taxable 
year, the greater of— 
‘‘(I) 9 percent, or 
‘‘(II) the percentage which will 
yield over a 10-year period amounts of 
credit under subsection (a) which have 
a present value equal to 70 percent of 
the qualified basis of such building, 
and 
‘‘(ii) in the case of any other building, 
the percentage which will yield over a 10- 
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year period amounts of credit under sub-
section (a) which have a present value 
equal to 30 percent of the qualified basis 
of such building. 
‘‘(B) METHOD
OF
DISCOUNTING.—The 
present value under subparagraph (A) shall be 
determined— 
‘‘(i) as of the last day of the 1st year 
of the 10-year period referred to in sub-
paragraph (A), 
‘‘(ii) by using a discount rate equal to 
72 percent of the average of the annual 
Federal mid-term rate and the annual 
Federal long-term rate applicable under 
section 1274(d)(1) to the month applicable 
under subparagraph (A) and compounded 
annually, and 
‘‘(iii) by assuming that the credit al-
lowable under this section for any year is 
received on the last day of such year. 
‘‘(3) CROSS REFERENCES.— 
‘‘(A) For treatment of certain rehabilita-
tion expenditures as separate buildings, see sub-
section (e). 
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‘‘(B) For determination of applicable per-
centage for increases in qualified basis after the 
1st year of the credit period, see subsection 
(f)(3). 
‘‘(C) For authority of housing credit agen-
cy to limit applicable percentage and qualified 
basis which may be taken into account under 
this section with respect to any building, see 
subsection (h)(7).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (B) of section 42(e)(3) 
is 
amended 
by 
striking 
‘‘subsection 
(b)(2)(B)(ii)’’ 
and 
inserting 
‘‘subsection 
(b)(2)(A)(ii)’’. 
(B) Subparagraph (A) of section 42(i)(2) 
is amended by striking ‘‘new building’’ and in-
serting ‘‘building’’. 
(b) MODIFICATIONS TO DEFINITION OF FEDERALLY 
SUBSIDIZED BUILDING.— 
(1) IN GENERAL.—Subparagraph (A) of section 
42(i)(2) is amended by striking ‘‘, or any below mar-
ket Federal loan,’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (B) of section 42(i)(2) 
is amended— 
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(i) by striking ‘‘BALANCE
OF
LOAN 
OR’’ in the heading thereof, 
(ii) by striking ‘‘loan or’’ in the mat-
ter preceding clause (i), and 
(iii) by striking ‘‘subsection (d)—’’ 
and all that follows and inserting ‘‘sub-
section (d) the proceeds of such obliga-
tion’’. 
(B) Subparagraph (C) of section 42(i)(2) 
is amended— 
(i) by striking ‘‘or below market Fed-
eral loan’’ in the matter preceding clause 
(i), 
(ii) in clause (i)— 
(I) by striking ‘‘or loan (when 
issued 
or 
made)’’ 
and 
inserting 
‘‘(when issued)’’, and 
(II) by striking ‘‘the proceeds of 
such obligation or loan’’ and inserting 
‘‘the proceeds of such obligation’’, and 
(iii) by striking ‘‘, and such loan is re-
paid,’’ in clause (ii). 
(C) Paragraph (2) of section 42(i) is 
amended by striking subparagraphs (D) and 
(E). 
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igible basis of such building by reason of 
paragraph (4) of such subsection.’’. 
(b) MODIFICATION TO REHABILITATION REQUIRE-
MENTS.— 
(1) IN
GENERAL.—Clause (ii) of section 
42(e)(3)(A) is amended— 
(A) by striking ‘‘10 percent’’ in subclause 
(I) and inserting ‘‘20 percent’’, and 
(B) by striking ‘‘$3,000’’ in subclause (II) 
and inserting ‘‘$6,000’’. 
(2) INFLATION ADJUSTMENT.—Paragraph (3) 
of section 42(e) is amended by adding at the end the 
following new subparagraph: 
‘‘(D) INFLATION
ADJUSTMENT.—In the 
case of any expenditures which are treated 
under paragraph (4) as placed in service during 
any calendar year after 2009, the $6,000 
amount in subparagraph (A)(ii)(II) shall be in-
creased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for such 
calendar year by substituting ‘calendar 
year 2008’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
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Any increase under the preceding sentence 
which is not a multiple of $100 shall be round-
ed to the nearest multiple of $100.’’. 
(3) CONFORMING AMENDMENT.—Subclause (II) 
of section 42(f)(5)(B)(ii) is amended by striking ‘‘if 
subsection (e)(3)(A)(ii)(II)’’ and all that follows and 
inserting ‘‘if the dollar amount in effect under sub-
section (e)(3)(A)(ii)(II) were two-thirds of such 
amount.’’. 
(c) INCREASE IN ALLOWABLE COMMUNITY SERVICE 
FACILITY SPACE FOR SMALL PROJECTS.—Clause (ii) of 
section 42(d)(4)(C) (relating to limitation) is amended by 
striking ‘‘10 percent of the eligible basis of the qualified 
low-income housing project of which it is a part. For pur-
poses of’’ and inserting ‘‘the sum of— 
‘‘(I) 15 percent of so much of the 
eligible basis of the qualified low-in-
come housing project of which it is a 
part as does not exceed $5,000,000, 
plus 
‘‘(II) 10 percent of so much of 
the eligible basis of such project as is 
not taken into account under sub-
clause (I). 
For purposes of’’. 
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(d) CLARIFICATION OF TREATMENT OF FEDERAL 
GRANTS.—Subparagraph (A) of section 42(d)(5) is 
amended to read as follows: 
‘‘(A) FEDERAL GRANTS NOT TAKEN INTO 
ACCOUNT IN DETERMINING ELIGIBLE BASIS.— 
The eligible basis of a building shall not include 
any costs financed directly or indirectly with the 
proceeds of a Federally funded grant.’’. 
(e) SIMPLIFICATION OF RELATED PARTY RULES.— 
Clause (iii) of section 42(d)(2)(D) is amended— 
(1) by striking all that precedes subclause (II), 
(2) by redesignating subclause (II) as clause 
(iii) and moving such clause two ems to the left, and 
(3) by striking the last sentence thereof. 
(f) REPEAL OF DEADWOOD.— 
(1) Clause (ii) of section 42(d)(2)(B) is amend-
ed 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. 
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(3) Paragraph (5) of section 42(d) is amended 
by striking subparagraph (B) and by redesignating 
subparagraph (C) as subparagraph (B). 
(g) EFFECTIVE DATE.—The amendments made by 
this subsection shall apply to buildings placed in service 
after the date of the enactment of this Act. 
SEC. 104. 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 alloca-
tion 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 DIS-
POSITION OF BUILDING.—Paragraph (6) of section 42(j) 
(relating to no recapture on disposition of building (or in-
terest therein) where bond posted) is amended to read as 
follows: 
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‘‘(6) NO
RECAPTURE
ON
DISPOSITION
OF 
BUILDING WHICH CONTINUES IN QUALIFIED USE.— 
‘‘(A) IN GENERAL.—The increase in tax 
under this subsection shall not apply solely by 
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 
subsection for such taxable or any subsequent 
taxable year, then— 
‘‘(i) the statutory period for the as-
sessment of any deficiency with respect to 
such increase in tax shall not expire before 
the expiration of 3 years from the date the 
Secretary is notified by the taxpayer (in 
such manner as the Secretary may pre-
scribe) of such reduction in qualified basis, 
and 
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‘‘(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 other-
wise prevent such assessment.’’. 
(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 by adding 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 
RECEIVED FOSTER CARE ASSISTANCE.—Clause (i) of sec-
tion 42(i)(3)(D) is amended by striking ‘‘or’’ at the end 
of subclause (I), by redesignating subclause (II) as sub-
clause (III), and by inserting after subclause (I) the fol-
lowing new subclause: 
‘‘(II) a student who was pre-
viously under the care and placement 
responsibility of the State agency re-
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sponsible for administering a plan 
under part B or part E of title IV of 
the Social Security Act, or’’. 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to buildings placed in service 
after the date of the enactment of this Act. 
(2) REPEAL
OF
BONDING
REQUIREMENT
ON 
DISPOSITION OF BUILDING.—The amendment made 
by subsection (c) shall apply to— 
(A) interests in buildings disposed after 
the date of the enactment of this Act, and 
(B) interests in buildings disposed of on or 
before such date if— 
(i) it is reasonably expected that such 
building will continue to be operated as a 
qualified low-income building (within the 
meaning of section 42 of the Internal Rev-
enue Code of 1986) for the remaining com-
pliance period (within the meaning of such 
section) with respect to such building, and 
(ii) the taxpayer elects the application 
of this subparagraph with respect to such 
disposition. 
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(3) ENERGY
EFFICIENCY
AND
HISTORIC
NA-
TURE TAKEN INTO ACCOUNT IN MAKING ALLOCA-
TIONS.—The amendments made by subsection (d) 
shall apply to allocations made after December 31, 
2008. 
(4) CONTINUED
ELIGIBILITY
FOR
STUDENTS 
WHO
RECEIVED
FOSTER
CARE
ASSISTANCE.—The 
amendments made by subsection (e) shall apply to 
determinations made after the date of the enactment 
of this Act. 
PART 2—MODIFICATIONS TO TAX-EXEMPT 
HOUSING BOND RULES 
SEC. 111. RECYCLING OF TAX-EXEMPT DEBT FOR FINANC-
ING RESIDENTIAL RENTAL PROJECTS. 
(a) IN GENERAL.—Subsection (i) of section 146 (re-
lating 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 IR-
RESPECTIVE OF OBLIGOR.— 
‘‘(A) IN
GENERAL.—If, during the 6- 
month period beginning on the date of a repay-
ment 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), 
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such repayment 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 refunding issue to the extent the principal 
amount of such refunding issue does not exceed 
the principal 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 
refunded 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)’’ be-
fore the period at the end. 
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(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. 112. 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 in-
come determinations) is amended by adding at the end 
the following new subparagraph: 
‘‘(C) EXCEPTION FOR PROJECTS WITH RE-
SPECT TO WHICH AFFORDABLE HOUSING CRED-
IT IS ALLOWED.—In the case of a project with 
respect to which credit is allowed under section 
42, the second sentence of subparagraph (B) 
shall be applied by substituting ‘building (with-
in the meaning of section 42)’ for ‘project’.’’. 
(b) STUDENTS.—Paragraph (2) of section 142(d) 
(relating to definitions and special rules) is amended by 
adding 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.’’. 
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(c) SINGLE-ROOM OCCUPANCY UNITS.—Paragraph 
(2) of section 142(d) (relating to definitions and special 
rules), as amended by this Act, is further amended by add-
ing 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 
qualified 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 3—REFORMS RELATED TO THE LOW-IN-
COME HOUSING CREDIT AND TAX-EXEMPT 
HOUSING BONDS 
SEC. 121. HOLD HARMLESS FOR REDUCTIONS IN AREA ME-
DIAN GROSS INCOME. 
(a) IN GENERAL.—Paragraph (2) of section 142(d) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(C) HOLD HARMLESS FOR REDUCTIONS 
IN AREA MEDIAN GROSS INCOME.— 
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‘‘(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 
CENSUS 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 calendar year) shall be the greater 
of the amount determined without regard 
to this clause or the sum of— 
‘‘(I) the area median gross in-
come determined under the HUD hold 
harmless policy with respect to such 
project for calendar year 2008, plus 
‘‘(II) any increase in the area 
median 
gross 
income 
determined 
under subparagraph (B) (determined 
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without regard to the HUD hold 
harmless policy and this subpara-
graph) with respect to such project 
for the current calendar year over the 
area median gross income (as so de-
termined) with respect to such project 
for calendar year 2008. 
‘‘(iii) HUD HOLD
HARMLESS
POL-
ICY.—The term ‘HUD hold harmless pol-
icy’ means the regulations under which a 
policy similar to the rules of clause (i) ap-
plied to prevent a change in the method of 
determining area median gross income 
from resulting in a reduction in the area 
median gross income determined with re-
spect to certain 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 
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been less but for the HUD hold harmless 
policy.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to determinations of area median 
gross income for calendar years after 2008. 
SEC. 122. EXCEPTION TO ANNUAL CURRENT INCOME DE-
TERMINATION REQUIREMENT WHERE DE-
TERMINATION 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 enactment of this Act. 
Subtitle B—Single Family Housing 
SEC. 131. FIRST-TIME HOMEBUYER CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 is amended by redesignating sec-
tion 36 as section 37 and by inserting after section 35 
the following new section: 
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‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual who is a first-time homebuyer of a principal resi-
dence in the United States during a taxable year, there 
shall be allowed as a credit against the tax imposed by 
this subtitle 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 $7,500. 
‘‘(B) MARRIED INDIVIDUALS FILING SEPA-
RATELY.—In the case of a married individual 
filing a separate return, subparagraph (A) shall 
be applied by substituting ‘$3,750’ for ‘$7,500’. 
‘‘(C) OTHER
INDIVIDUALS.—If two or 
more individuals who are not married purchase 
a principal residence, the amount of the credit 
allowed 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 indi-
viduals shall not exceed $7,500. 
‘‘(2) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
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‘‘(A) IN GENERAL.—The amount allowable 
as a credit under subsection (a) (determined 
without regard to this paragraph) for the tax-
able 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) $70,000 ($110,000 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 taxable year increased by any amount ex-
cluded 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 
individual (and if married, such individual’s spouse) 
had no present ownership interest in a principal resi-
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dence during the 3-year period ending on the date 
of the purchase of the principal residence to which 
this section applies. 
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(3) PURCHASE.— 
‘‘(A) IN GENERAL.—The term ‘purchase’ 
means any acquisition, but only if— 
‘‘(i) the property is not acquired from 
a person related to the person acquiring it, 
and 
‘‘(ii) the basis of the property in the 
hands of the person acquiring it is not de-
termined— 
‘‘(I) in whole or in part by ref-
erence to the adjusted basis of such 
property in the hands of the person 
from whom acquired, or 
‘‘(II) under section 1014(a) (re-
lating to property acquired from a de-
cedent). 
‘‘(B) CONSTRUCTION.—A residence which 
is constructed by the taxpayer shall be treated 
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as purchased by the taxpayer on the date the 
taxpayer first occupies such residence. 
‘‘(4) PURCHASE
PRICE.—The term ‘purchase 
price’ means the adjusted basis of the principal resi-
dence on the date such residence is purchased. 
‘‘(5) RELATED
PERSONS.—A person shall be 
treated as related to another person if the relation-
ship between such persons would result in the dis-
allowance of losses under section 267 or 707(b) (but, 
in applying section 267(b) and (c) for purposes of 
this section, paragraph (4) of section 267(c) shall be 
treated as providing that the family of an individual 
shall include only his spouse, ancestors, and lineal 
descendants). 
‘‘(d) EXCEPTIONS.—No credit under subsection (a) 
shall be allowed to any taxpayer for any taxable year with 
respect to the purchase of a residence if— 
‘‘(1) a credit under section 1400C (relating to 
first-time homebuyer in the District of Columbia) is 
allowable to the taxpayer (or the taxpayer’s spouse) 
for such taxable year or any prior taxable year, 
‘‘(2) the residence is financed by the proceeds 
of a qualified mortgage issue the interest on which 
is exempt from tax under section 103, 
‘‘(3) the taxpayer is a nonresident alien, or 
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‘‘(4) the taxpayer disposes of such residence (or 
such residence ceases to be the principal residence of 
the taxpayer (and, if married, the taxpayer’s 
spouse)) before the close of such taxable year. 
‘‘(e) REPORTING.—If the Secretary requires informa-
tion reporting under section 6045 by a person described 
in subsection (e)(2) thereof to verify the eligibility of tax-
payers for the credit allowable by this section, the excep-
tion provided by section 6045(e) shall not apply. 
‘‘(f) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, if a credit under subsection 
(a) is allowed to a taxpayer, the tax imposed by this 
chapter shall be increased by 62⁄3 percent of the 
amount of such credit for each taxable year in the 
recapture period. 
‘‘(2) ACCELERATION OF RECAPTURE.—If a tax-
payer disposes of the principal residence with respect 
to which a credit was allowed under subsection (a) 
(or such residence ceases to be the principal resi-
dence of the taxpayer (and, if married, the tax-
payer’s spouse)) before the end of the recapture pe-
riod— 
‘‘(A) the tax imposed by this chapter for 
the taxable year of such disposition or ces-
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sation, shall be increased by the excess of the 
amount of the credit allowed over the amounts 
of tax imposed by paragraph (1) for preceding 
taxable years, and 
‘‘(B) paragraph (1) shall not apply with 
respect to such credit for such taxable year or 
any subsequent taxable year . 
‘‘(3) LIMITATION BASED ON GAIN.—In the case 
of the sale of the principal residence to a person who 
is not related to the taxpayer, the increase in tax de-
termined under paragraph (2) shall not exceed the 
amount of gain (if any) on such sale. Solely for pur-
poses of the preceding sentence, the adjusted basis 
of such residence shall be reduced by the amount of 
the credit allowed under subsection (a) to the extent 
not previously recaptured under paragraph (1). 
‘‘(4) EXCEPTIONS.— 
‘‘(A) DEATH OF TAXPAYER.—Paragraphs 
(1) and (2) shall not apply to any taxable year 
ending after the date of the taxpayer’s death. 
‘‘(B) INVOLUNTARY
CONVERSION.—Para-
graph (2) shall not apply in the case of a resi-
dence which is compulsorily or involuntarily 
converted (within the meaning of section 
1033(a)) if the taxpayer acquires a new prin-
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cipal residence during the 2-year period begin-
ning on the date of the disposition or cessation 
referred to in paragraph (2). Paragraph (2) 
shall apply to such new principal residence dur-
ing the recapture period in the same manner as 
if such new principal residence were the con-
verted residence. 
‘‘(C) TRANSFERS BETWEEN SPOUSES OR 
INCIDENT TO DIVORCE.—In the case of a trans-
fer of a residence to which section 1041(a) ap-
plies— 
‘‘(i) paragraph (2) shall not apply to 
such transfer, and 
‘‘(ii) in the case of taxable years end-
ing after such transfer, paragraphs (1) and 
(2) shall apply to the transferee in the 
same manner as if such transferee were 
the transferor (and shall not apply to the 
transferor). 
‘‘(5) JOINT RETURNS.—In the case of a credit 
allowed under subsection (a) with respect to a joint 
return, half of such credit shall be treated as having 
been allowed to each individual filing such return for 
purposes of this subsection. 
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‘‘(6) RECAPTURE
PERIOD.—For purposes of 
this subsection, the term ‘recapture period’ means 
the 15 taxable years beginning with the second tax-
able year following the taxable year in which the 
purchase of the principal residence for which a cred-
it is allowed under subsection (a) was made. 
‘‘(g) APPLICATION OF SECTION.—This section shall 
only apply to a principal residence purchased by the tax-
payer after ll, and before April 1, 2009.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) is amended by striking 
‘‘and’’ at the end of subparagraph (U), by striking 
the period and inserting ‘‘, and’’ and the end of sub-
paragraph (V), and by inserting after subparagraph 
(V) the following new subparagraph: 
‘‘(W) section 36(f) (relating to recapture of 
homebuyer credit).’’. 
(2) Section 6211(b)(4)(A) is amended by strik-
ing ‘‘ and 35,’’ and inserting ‘‘35, 36,’’. 
(3) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘, 36,’’ after 
‘‘section 35’’. 
(4) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 is amended by re-
designating the item relating to section 36 as an 
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item relating to section 37 and by inserting before 
such item the following new item: 
‘‘Sec. 36. First-time homebuyer credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to ll. 
SEC. 132. ADDITIONAL STANDARD DEDUCTION FOR REAL 
PROPERTY TAXES FOR NONITEMIZERS. 
(a) IN GENERAL.—Section 63(c)(1) (defining stand-
ard deduction) is amended by striking ‘‘and’’ at the end 
of subparagraph (A), by striking the period at the end 
of subparagraph (B) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(C) in the case of any taxable year begin-
ning in 2008, the real property tax deduction.’’. 
(b) DEFINITION.—Section 63(c) is amended by add-
ing at the end the following new paragraph: 
‘‘(8) REAL PROPERTY TAX DEDUCTION.—For 
purposes of paragraph (1), the real property tax de-
duction is so much of the amount of State and local 
real property taxes (within the meaning of section 
164) paid or accrued by the taxpayer during the tax-
able year which do not exceed $350 ($700 in the 
case of a joint return).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
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Subtitle C—General Provisions 
SEC. 141. TEMPORARY LIBERALIZATION OF TAX-EXEMPT 
HOUSING BOND RULES. 
(a) TEMPORARY INCREASE IN VOLUME CAP.— 
(1) IN
GENERAL.—Subsection (d) of section 
146 is amended by adding at the end the following 
new paragraph: 
‘‘(5) INCREASE AND SET ASIDE FOR HOUSING 
BONDS FOR 2008.— 
‘‘(A) INCREASE FOR 2008.—In the case of 
calendar year 2008, the State ceiling for each 
State shall be increased by an amount equal to 
$10,000,000,000 multiplied by a fraction— 
‘‘(i) the numerator of which is the 
population of such State, and 
‘‘(ii) the denominator of which is the 
total population of all States. 
‘‘(B) SET ASIDE.— 
‘‘(i) IN
GENERAL.—Any amount of 
the State ceiling for any State which is at-
tributable to an increase under this para-
graph shall be allocated solely for one or 
more qualified housing issues. 
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‘‘(ii) QUALIFIED
HOUSING
ISSUE.— 
For purposes of this paragraph, the term 
‘qualified housing issue’ means— 
‘‘(I) an issue described in section 
142(a)(7) (relating to qualified resi-
dential rental projects), or 
‘‘(II) a qualified mortgage issue 
(determined by substituting ‘12-month 
period’ for ‘42-month period’ each 
place 
it 
appears 
in 
section 
143(a)(2)(D)(i)).’’. 
(2) 
CARRYFORWARD
OF
UNUSED
LIMITA-
TIONS.—Subsection (f) of section 146 is amended by 
adding at the end the following new paragraph: 
‘‘(6) SPECIAL RULES FOR INCREASED VOLUME 
CAP UNDER SUBSECTION (d)(5).—No amount which 
is attributable to the increase under subsection 
(d)(5) may be used— 
‘‘(A) for any issue other than a qualified 
housing issue (as defined in subsection (d)(5)), 
or 
‘‘(B) to issue any bond after calendar year 
2010.’’. 
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(b) TEMPORARY RULE
FOR USE
OF QUALIFIED 
MORTGAGE BONDS PROCEEDS
FOR SUBPRIME REFI-
NANCING LOANS.— 
(1) IN GENERAL.—Section 143(k) (relating to 
other definitions and special rules) is amended by 
adding at the end the following new paragraph: 
‘‘(12) 
SPECIAL
RULES
FOR
SUBPRIME 
REFINANCINGS.— 
‘‘(A) IN
GENERAL.—Notwithstanding the 
requirements of subsection (i)(1), the proceeds 
of a qualified mortgage issue may be used to re-
finance a mortgage on a residence which was 
originally financed by the mortgagor through a 
qualified subprime loan. 
‘‘(B) SPECIAL RULES.—In applying sub-
paragraph (A) to any refinancing— 
‘‘(i) subsection (a)(2)(D)(i) shall be 
applied by substituting ‘12-month period’ 
for ‘42-month period’ each place it ap-
pears, 
‘‘(ii) subsection (d) (relating to 3-year 
requirement) shall not apply, and 
‘‘(iii) subsection (e) (relating to pur-
chase price requirement) shall be applied 
by using the market value of the residence 
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at the time of refinancing in lieu of the ac-
quisition cost. 
‘‘(C) QUALIFIED
SUBPRIME
LOAN.—The 
term ‘qualified subprime loan’ means an adjust-
able rate single-family residential mortgage loan 
made after December 31, 2001, and before 
January 1, 2008, that the bond issuer deter-
mines would be reasonably likely to cause finan-
cial hardship to the borrower if not refinanced. 
‘‘(D) 
TERMINATION.—This 
paragraph 
shall not apply to any bonds issued after De-
cember 31, 2010.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
SEC. 142. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITA-
TIONS ON TAX-EXEMPT HOUSING BONDS, 
LOW-INCOME HOUSING TAX CREDIT, AND RE-
HABILITATION CREDIT. 
(a) TAX-EXEMPT INTEREST ON CERTAIN HOUSING 
BONDS
EXEMPTED
FROM
ALTERNATIVE
MINIMUM 
TAX.— 
(1) IN GENERAL.—Subparagraph (C) of section 
57(a)(5) (relating to specified private activity bonds) 
is amended by redesignating clauses (iii) and (iv) as 
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clauses (iv) and (v), respectively, and by inserting 
after clause (ii) the following new clause: 
‘‘(iii) EXCEPTION FOR CERTAIN HOUS-
ING BONDS.—For purposes of clause (i), 
the term ‘private activity bond’ shall not 
include any bond issued after the date of 
the enactment of this clause if such bond 
is— 
‘‘(I) an exempt facility bond 
issued as part of an issue 95 percent 
or more of the net proceeds of which 
are to be used to provide qualified res-
idential rental projects (as defined in 
section 142(d)), 
‘‘(II) a qualified mortgage bond 
(as defined in section 143(a)), or 
‘‘(III) a qualified veterans’ mort-
gage bond (as defined in section 
143(b)). 
The preceding sentence shall not apply to 
any refunding bond unless such preceding 
sentence applied to the refunded bond (or 
in the case of a series of refundings, the 
original bond).’’. 
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(2) NO ADJUSTMENT TO ADJUSTED CURRENT 
EARNINGS.—Subparagraph (B) of section 56(g)(4) 
is amended by adding at the end the following new 
clause: 
‘‘(iii) TAX EXEMPT INTEREST ON CER-
TAIN
HOUSING
BONDS.—Clause (i) shall 
not apply in the case of any interest on a 
bond to which section 57(a)(5)(C)(iii) ap-
plies.’’. 
(b) ALLOWANCE OF LOW-INCOME HOUSING CREDIT 
AGAINST ALTERNATIVE MINIMUM TAX.—Subparagraph 
(B) of section 38(c)(4) (relating to specified credits) is 
amended by redesignating clauses (ii) through (iv) as 
clauses (iii) through (v) and inserting after clause (i) the 
following new clause: 
‘‘(ii) the credit determined under sec-
tion 42 to the extent attributable to build-
ings placed in service after December 31, 
2007,’’. 
(c) 
ALLOWANCE
OF
REHABILITATION
CREDIT 
AGAINST ALTERNATIVE MINIMUM TAX.—Subparagraph 
(B) of section 38(c)(4), as amended by subsection (b), is 
amended by striking ‘‘and’’ at the end of clause (iv), by 
redesignating clause (v) as clause (vi), and by inserting 
after clause (iv) the following new clause: 
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‘‘(v) the credit determined under sec-
tion 47 to the extent attributable to quali-
fied rehabilitation expenditures properly 
taken into account for periods after De-
cember 31, 2007, and’’. 
(d) EFFECTIVE DATE.— 
(1) HOUSING BONDS.—The amendments made 
by subsection (a) shall apply to bonds issued after 
the date of the enactment of this Act. 
(2) LOW
INCOME
HOUSING
CREDIT.—The 
amendments made by subsection (b) shall apply to 
credits determined under section 42 of the Internal 
Revenue Code of 1986 to the extent attributable to 
buildings placed in service after December 31, 2007. 
(3) REHABILITATION
CREDIT.—The amend-
ments made by subsection (c) shall apply to credits 
determined under section 47 of the Internal Revenue 
Code of 1986 to the extent attributable to qualified 
rehabilitation expenditures properly taken into ac-
count for periods after December 31, 2007. 
SEC. 143. BONDS GUARANTEED BY FEDERAL HOME LOAN 
BANKS ELIGIBLE FOR TREATMENT AS TAX- 
EXEMPT BONDS. 
(a) IN GENERAL.—Subparagraph (A) of section 
149(b)(3) of the Internal Revenue Code of 1986 (relating 
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to exceptions for certain insurance programs) is amended 
by striking ‘‘or’’ at the end of clause (ii), by striking the 
period at the end of clause (iii) and inserting ‘‘, or’’ and 
by adding at the end the following new clause: 
‘‘(iv) any guarantee by a Federal 
home loan bank made in connection with 
the original issuance of a bond during the 
period beginning on the date of the enact-
ment of this Act and ending on December 
31, 2010 (or a renewal or extension of a 
guarantee so made).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to guarantees made after the date 
of the enactment of this Act. 
SEC. 144. MODIFICATION OF RULES PERTAINING TO 
FIRPTA NONFOREIGN AFFIDAVITS. 
(a) IN GENERAL.—Subsection (b) of section 1445 
(relating to exemptions) is amended by adding at the end 
the following: 
‘‘(9) ALTERNATIVE
PROCEDURE
FOR
FUR-
NISHING NONFOREIGN AFFIDAVIT.—For purposes of 
paragraphs (2) and (7)— 
‘‘(A) IN
GENERAL.—Paragraph (2) shall 
be treated as applying to a transaction if, in 
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connection with a disposition of a United States 
real property interest— 
‘‘(i) the affidavit specified in para-
graph (2) is furnished to a qualified sub-
stitute, and 
‘‘(ii) the qualified substitute furnishes 
a statement to the transferee stating, 
under penalty of perjury, that the qualified 
substitute has such affidavit in his posses-
sion. 
‘‘(B) REGULATIONS.—The Secretary shall 
prescribe such regulations as may be necessary 
or appropriate to carry out this paragraph.’’. 
(b) QUALIFIED SUBSTITUTE.—Subsection (f) of sec-
tion 1445 (relating to definitions) is amended by adding 
at the end the following new paragraph: 
‘‘(6) 
QUALIFIED
SUBSTITUTE.—The 
term 
‘qualified substitute’ means, with respect to a dis-
position of a United States real property interest— 
‘‘(A) the person (including any attorney or 
title company) responsible for closing the trans-
action, other than the transferor’s agent, and 
‘‘(B) the transferee’s agent.’’. 
(c) EXEMPTION NOT TO APPLY IF KNOWLEDGE OR 
NOTICE THAT AFFIDAVIT OR STATEMENT IS FALSE.— 
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