Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE.

This Act may be cited as the ''First-time Homebuyer Affordability
Act of 1993''.

SEC. 2. FINDINGS AND POLICY.

(a) Findings.--The Congress finds that--
(1) it is desirable to make funds available from individual
retirement plans to encourage first time home ownership, and
(2) the tax and penalty on the premature withdrawal of
funds from individual retirement plans are substantial
impediments to making such funds available for that purpose.
(b) Policy.--It is the policy of the Congress to remove impediments
to home investment by first-time homebuyers by permitting owners of
individual retirement plans to direct the trustees of such plans to
invest plan funds as home equity or debt in the homes of family members
who are first-time homebuyers.

SEC. 3. CERTAIN RETIREMENT PLANS AUTHORIZED TO MAKE EQUITY INVESTMENTS
IN PRINCIPAL RESIDENCES FOR FIRST-TIME HOMEBUYERS.

(a) Exemption From Prohibited Transaction Rules.--Section 4975 of
the Internal Revenue Code of 1986 (relating to tax on prohibited
transactions) is amended by redesignating subsections (h) and (i) as
subsections (i) and (j), respectively, and by inserting after
subsection (g) the following new subsection:
''(h) Special Rule for Home Equity Participation Arrangements.--
''(1) In general.--The prohibitions provided in subsection
(c) shall not apply to any qualified home equity participation
arrangement.
''(2) Qualified home equity participation arrangement.--For
purposes of this subsection--
''(A) In general.--The term 'qualified home equity
participation arrangement' means an arrangement--
''(i) under which the trustee of an
individual retirement plan, at the direction of
the eligible participant, shall acquire an
ownership interest in all or any part of any
dwelling unit which within a reasonable period
of time (determined at the time the arrangement
is executed) is to be used as the principal
residence for a first-time homebuyer, and
''(ii) which meets the requirements of
subparagraph (B) of this paragraph.
''(B) Ownership interest requirement.--An
arrangement shall meet the requirements of this
subparagraph if the ownership interest described in
subparagraph (A)--
''(i) is a fee interest in such property
equal to the percentage which--
''(I) the amount invested by the
trustee of the individual retirement
plan, bears to
''(II) the acquisition cost of or
total equity in the dwelling unit,
''(ii) by its terms requires repayment in
full upon--
''(I) the sale or other transfer of
the dwelling unit, or
''(II) the cessation of use as the
principal residence of the first-time
homebuyer, and
''(iii) may not be used as security for any
loan secured by any interest in the dwelling
unit.
''(3) Definitions.--For purposes of this subsection--
''(A) Eligible participant.--The term 'eligible
participant' means an individual on whose behalf an
individual retirement plan is established.
''(B) First-time homebuyer.--The term 'first-time
homebuyer' means an individual who--
''(i) is an eligible participant or
qualified family member, and
''(ii) had (and if married, such
individual's spouse had) no present ownership
interest in a principal residence at any time
during the 36-month period before the date of
the arrangement.
''(C) Qualified family member.--The term 'qualified
family member' means a child (as defined in section
151(c)(3)), parent, or grandparent of the eligible
participant (or such participant's spouse). Section
152(b)(2) shall apply in determining if an individual
is a parent or grandparent of an eligible participant
(or such participant's spouse).
''(D) Acquisition; etc.--
''(i) Acquisition.--The term 'acquisition'
includes construction, reconstruction, and
improvement related to such acquisition.
''(ii) Acquisition cost.--The term
'acquisition cost' has the meaning given such
term by section 143(k)(3).
''(E) Principal Residence.--The term 'principal
residence' has the same meaning as when used in section
1034.''.
(b) Effective Date.--The amendment made by this section shall apply
to arrangements entered into after December 31, 1992.

SEC. 4. LOANS USED TO ACQUIRE PRINCIPAL RESIDENCES FOR FIRST-TIME
HOMEBUYERS.

(a) Individual Retirement Plans.--Section 408(e) of the Internal
Revenue Code of 1986 (relating to tax treatment of accounts and
annuities) is amended by adding at the end thereof the following new
paragraph:
''(7) Loans used to purchase a home for first-time
homebuyers.--
''(A) In general.--Paragraphs (3) and (4) shall not
apply to any qualified home purchase loan made, or
secured, by an individual retirement plan.
''(B) Qualified home purchase loan.--For purposes
of this paragraph, the term 'qualified home purchase
loan' means a loan--
''(i) made by the trustee of an individual
retirement plan at the direction of the
individual on whose behalf such plan is
established,
''(ii) the proceeds of which are used for
the acquisition of a dwelling unit which within
a reasonable period of time (determined at the
time the loan is made) is to be used as the
principal residence for a first-time homebuyer,
''(iii) which is secured by the dwelling
unit,
''(iv) which by its terms requires
repayment in full within 15 years after the
date of acquisition of the dwelling unit,
''(v) which by its terms treats any amount
remaining unpaid in the taxable year beginning
after the period described in clause (iv) as
distributed in such taxable year to the
individual on whose behalf such plan is
established and subject to section 72(t)(1),
and
''(vi) which bears interest from the date
of the loan at a rate not less than the rate
for comparable United States Treasury
obligations on such date.
''(C) Definitions.--For purposes of this
paragraph--
''(i) First-time homebuyer.--The term
'first-time homebuyer' has the meaning given
such term by section 4975(h)(3)(B).
''(ii) Acquisition.--The term 'acquisition'
has the meaning given such term by section
4975(h)(3)(D)(i).
''(iii) Principal residence.--The term
'principal residence' has the same meaning as
when used in section 1034.
''(iv) Date of acquisition.--The term 'date
of acquisition' means the date--
''(I) on which a binding contract
to acquire the principal residence to
which subparagraph (B) applies is
entered into, or
''(II) on which construction,
reconstruction, or improvement of such
a principal residence is commenced.''.
(b) Prohibited Transaction.--Section 4975(d) of the Internal
Revenue Code of 1986 (relating to exemptions from tax on prohibited
transactions) is amended by striking ''or'' at the end of paragraph
(14), by striking the period at the end of paragraph (15) and inserting
''; or'', and by inserting after paragraph (15) the following new
paragraph:
''(16) any loan that is a qualified home purchase loan (as
defined in section 408(e)(7)(B)).''.
(c) Effective Date.--The amendments made by this section shall
apply to loans made after December 31, 1992.
Output:
First-time Homebuyer Affordability Act of 1993 - Amends the Internal Revenue Code to make the tax on prohibited transactions inapplicable to a home equity participation arrangement. Describes such arrangement as one in which the eligible participant in an individual retirement plan directs the plan trustee to acquire an ownership interest in all or part of any dwelling unit which within a reasonable period of time is to be used as the principal residence for a first-time homebuyer. Requires such ownership interest to be a fee interest which requires full repayment. Describes the first-time homebuyer as an eligible participant or a qualified family member (child, parent, grandparent, or spouse) who had no present ownership interest in a principal residence during the 36-month period before the date of the arrangement.
Allows the use of amounts in an individual retirement plan to make loans to purchase a home for a first-time homebuyer on behalf of an eligible participant or a qualified family member. Requires the repayment of first-time homebuyer loans within 15 years.