Page:United States Statutes at Large Volume 102 Part 4.djvu/676

 102 STAT. 3646

PUBLIC LAW 100-647—NOV. 10, 1988 "(I) the average area purchase price (as defined in subsection (e)(2)) for residences described in subsection (e)(3)(A) which are located in such area bears to "(II) the average purchase price (determined in accordance with the principles of subsection (e)(2)) for residences so described which are located in the United States, "(iv) EXISTING HOUSING PRICE RATIO.—The existing

housing price ratio for any area is the ratio determined in accordance with clause (iii) but with respect to residences described in subsection (e)(3)(B)." (c) DETERMINATIONS OF FAMILY INCOME TO B E BASED ON FAMILY

SIZE.—Subsection (f) of section 143 of the 1986 Code (relating to income requirements) is further amended by adding at the end thereof the following new paragraph: "(6) ADJUSTMENT TO INCOME REQUIREMENTS BASED ON FAMILY

SIZE.—In the case of a mortgagor having a family of fewer than 3 individuals, the preceding provisions of this subsection shall be applied by substituting— "(A) '100 percent' for '115 percent' each place it appears, and "(B) '120 percent' for '140 percent' each place it appears." (d) QUALIFIED MORTGAGE BONDS SUBJECT TO ARBITRAGE REBATE RULES APPLICABLE TO OTHER TAX-EXEMPT BONDS.—

(1) Paragraph (1) of section 143(g) of the 1986 Code (relating to requirements related to arbitrage) is amended— (A) by striking out "paragraphs (2) and (3) of this subsection" and inserting in lieu thereof "paragraph (2) of this subsection and, in the case of an issue described in subsection (b)(D, such issue also meets the requirements of paragraph (3) of this subsection", and (B) by striking out "(other than subsection (f) thereof)". (2) Paragraph (1) of section 148(f) of the 1986 Code is amended by striking out "qualified mortgage bond or". (e) LOANS PROVIDED THROUGH QUALIFIED MORTGAGE ISSUE MUST ORIGINATE WITHIN 42 MONTHS OF DATE OF ISSUE.—Paragraph (2) of

section 143(a) of the 1986 Code (defining qualified mortgage issue) is amended by adding at the end thereof the following new subparagraph: "(D) PROCEEDS MUST BE USED WITHIN 42 MONTHS OF DATE OF ISSUANCE.—

"(i) IN GENERAL.—Except as otherwise provided in this subparagraph, an issue shall not meet the requirement of subparagraph (A)(i) unless— "(I) all proceeds of the issue required to be used to Hnance owner-occupied residences are so used within the 42-month period beginning on the date of issuance of the issue (or, in the case of a refunding bond, within the 42-month period beginning on the date of issuance of the original bond) or, to the extent not so used within such period, are used within such period to redeem bonds which are part of such issue, and "(II) no portion of the proceeds of the issue are used to make or finance any loan (other than a loan which is a nonpurpose investment within the

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