Page:United States Statutes at Large Volume 100 Part 3.djvu/807

 PUBLIC LAW 99-514—OCT. 22, 1986

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100 STAT. 2615

"(ii) not later than 60 days after the redemption of the last bond, 100 percent of such aggregate amount not theretofore paid to the United States. "(E) SIMPLIFIED ACCOUNTING.—The Secretary shall permit any simplified system of accounting for purposes of this paragraph which the issuer establishes to the satisfaction of the Secretary will assure that the purposes of this paragraph are carried out. "(F) NoNPURPOSE INVESTMENT.—For purposes of this paragraph, the term 'nonpurpose investment' has the meaning given such term by section 148(f)(6)(A).

"(h) PORTION OF LOANS REQUIRED TO B E PLACED IN TARGETED AREAS.—

"(1) IN GENERAL.—An issue meets the requirements of this subsection only if at least 20 percent of the proceeds of the issue which are devoted to providing owner-financing is made available (with reasonable diligence) for owner-financing of targeted area residences for at least 1 year after the date on which owner-financing is first made available with respect to targeted area residences. "(2) LIMITATION.—Nothing in paragraph (1) shall be treated as requiring the making available of an amount which exceeds 40 percent of the average annual aggregate principal amount of mortgages executed during the immediately preceding 3 calendar years for single-family, owner-occupied residences located in targeted areas within the jurisdiction of the issuing authority, "(i) OTHER REQUIREMENTS.— "(1) MORTGAGES MUST BE NEW MORTGAGES.—

"(A) IN GENERAL.—An issue meets the requirements of this subsection only if no part of the proceeds of such issue is used to acquire or replace existing mortgages. "(B) EXCEPTIONS.—Under regulations prescribed by the Secretary, the replacement of— ,, "(i) construction period loans, ' "(ii) bridge loans or similar temporary initial financing, and -i9.«v'. "(iii) in the case of a qualified rehabilitation, an existing mortgage, shall not be treated as the acquisition or replacement of an -8' » existing mortgage for purposes of subparagraph (A). "(2) CERTAIN REQUIREMENTS MUST BE MET WHERE MORTGAGE IS

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ASSUMED.—An issue meets the requirements of this subsection only if each mortgage with respect to which owner-financing has been provided under such issue may be assumed only if the requirements of subsections (c), (d), and (e), and the requirements of paragraph (1) or (3)(B) of subsection (f) (whichever applies), are met with respect to such assumption, "(j) TARGETED AREA RESIDENCES.—

"(1) IN GENERAL.—For purposes of this section, the term 'targeted area residence' means a residence in an area which is either— "(A) a qualified census tract, or "(B) an area of chronic economic distress. "(2) QUALIFIED CENSUS TRACT.— "(A) IN GENERAL.—For purposes of paragraph (1), the term 'qualified census tract' means a census tract in which

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