PERMANENT EXTENSION OF QUALIFIED MORTGAGE BONDS.

SEC. 13141. PERMANENT EXTENSION OF QUALIFIED MORTGAGE BONDS. (a) In General.— Paragraph (1) of section 143(a) (defining qualified mortgage bond) is amended to read as follows: “(1) Qualified mortgage bond defined.— For purposes of this title, the term ‘qualified mortgage bond’ means a bond which is issued as part of a qualified mortgage issue.” (b) Mortgage Credit Certificates.— Section 25 is amended by striking subsection (h) and by redesignating subsections (i) and (j) as subsections (h) and (i), respectively. (c) Treatment of Resale Price Control and Subsidy Lien Programs.— Subsection (k) of section 143 is amended by adding at the end thereof the following new paragraph: “(10) Treatment of resale price control and subsidy lien programs.— “(A) In general.— In the case of a residence which is located in a high housing cost area (as defined in section 143(f)(5)), the interest of a governmental unit in such residence by reason of financing provided under any qualified program shall not be taken into account under this section (other than subsection (m)), and the acquisition cost of the residence which is taken into account under subsection (e) shall be such cost reduced by the amount of such financing. “(B) Qualified program.— For purposes of subparagraph (A), the term ‘qualified program’ means any governmental program providing mortgage loans (other than 1st mortgage loans) or grants— “(i) which restricts (throughout the 9-year period beginning on the date the financing is provided) the resale of the residence to a purchaser qualifying under this section and to a price determined by an index that reflects less than the full amount of any appreciation in the residence’s value, or “(ii) which provides for deferred or reduced interest payments on such financing and grants the governmental unit a share in the appreciation of the residence, but only if such financing is not provided directly or indirectly through the use of any tax-exempt private activity bond.” (d) Financing Allowed for Contract for Deed Agreements.— (1) In general.— Paragraph (2) of section 143(d) (relating to exceptions to 3-year requirement) is amended— (A) by striking “and” at the end of subparagraph (A), (B) by adding “and” at the end of subparagraph (B), and (C) by inserting after subparagraph (B) the following new subparagraph: 107 STAT. 437 “(C) financing with respect to land described in subsection (i)(1)(C) and the construction of any residence thereon.” (2) Exception to new mortgage requirement.— Paragraph (1) of section 143(i) (relating to mortgages must be new mortgages) is amended by adding at the end thereof the following new subparagraph: “(C) Exception for certain contract for deed agreements.— “(i) In general.— In the case of land possessed under a contract for deed by a mortgagor— “(I) whose principal residence (within the meaning of section 1034) is located on such land, and “(II) whose family income (as defined in subsection (f)(2)) is not more than 50 percent of applicable median family income (as defined in subsection (f)(4)), the contract for deed shall not be treated as an existing mortgage for purposes of subparagraph (A). “(ii) Contract for deed defined.— For purposes of this subparagraph, the term ‘contract for deed’ means a seller-financed contract for the conveyance of land under which— “(I) legal title does not pass to the purchaser until the consideration under the contract is fully paid to the seller, and “(II) the seller’s remedy for nonpayment is forfeiture rather than judicial or nonjudicial fore-closure.” (3) Acquisition cost includes cost of land.— Clause (iii) of section 143(k)(3)(B) is amended by inserting “(other than land described in subsection (i)(1)(C)(i))” after “cost of land”. (e) Financing of New 2-Family Residences Permitted.— Paragraph (7) of section 143(k) is amended by adding at the end thereof the following flush sentence: “Subparagraph (B) shall not apply to any 2-family residence if the residence is a targeted area residence and the family income of the mortgagor meets the requirement of subsection (f)(3)(B).” (f) Effective Dates.— (1) Bonds.— The amendment made by subsection (a) shall apply to bonds issued after June 30, 1992. (2) Certificates.— The amendment made by subsection (b) shall apply to elections for periods after June 30, 1992. (3) Subsections (c) and (e).— The amendments made by subsections (c) and (e) shall apply to qualified mortgage bonds issued and mortgage credit certificates provided on or after the date of enactment of this Act. (4) Contract for deed agreements.— The amendments made by subsection (d) shall apply to loans originated and credit certificates provided after the date of the enactment of this Act.