Page:United States Statutes at Large Volume 94 Part 2.djvu/1383

 PUBLIC LAW 96-499—DEC. 5, 1980

94 STAT. 2661

"(2) EXCEPTIONS.—The following shall not be treated as mortgage subsidy bonds: "(A) any qualified mortgage bond; and "(B) any qualified veterans' mortgage bond. "(c) QUALIFIED MORTGAGE BOND; QUALIFIED MORTGAGE ISSUE; QUALIFIED VETERANS' MORTGAGE BOND.— "(1) QUALIFIED MORTGAGE BOND DEFINED.—

(A) IN GENERAL.—For purposes of this title, the term 'qualified mortgage bond' means an obligation which is issued as part of a qualified mortgage issue. "(B) TERMINATION DECEMBER 31, 1983.—No obligation issued after December 31, 1983, may be treated as a qualified mortgage bond. "(2) QUALIFIED MORTGAGE ISSUE DEFINED.—

(A) DEFINITION.—For purposes of this title, the term 'qualified mortgage issue means an issue by a State or political subdivision thereof of 1 or more obligations, but only if— "(i) all proceeds of such issue (exclusive of issuance costs and a reasonably required reserve) are to be used to finance owner-occupied residences, and "(ii) such issue meets the requirements of subsections (d),(e),(a(g),(h),(i),andO). "(B) GOOD FAITH EFFORT TO COMPLY WITH MORTGAGE ELIGIBILITY REQUIREMENTS.—An issue which fails to meet 1 or

more of the requirements of subsections (d), (e), and (f) and paragraphs (2) and (3) of subsection (j) shall be treated as meeting such requirements if— ' (i) the issuer in good faith attempted to meet all such requirements before the mortgages were executed, (ii) 95 percent or more of the proceeds devoted to owner-financing was devoted to residences with respect to which (at the time the mortgages were executed) all such requirements were met, and "(iii) any failure to meet the requirements of such subsections and paragraphs is corrected within a reasonable period after such failure is first discovered. "(C) GOOD FAITH EFFORT TO COMPLY WITH OTHER REQUIRE-

MENTS.—An issue which fails to meet 1 or more of the requirements of subsections (g), (h), and (i), and paragraph (1) of subsection (j) shall be treated as meeting such requirements if— "(i) the issuer in good faith attempted to meet all such requirements, and ' (ii) any failure to meet such requirements is due to inadvertent error after taking reasonable steps to comply with such requirements. "(3) QUALIFIED VETERANS' MORTGAGE BOND DEFINED.—For purposes of this section, the term 'qualified veterans' mortgage bond' means any obligation— "(A) which is issued in registered form as part of an issue substantially all of the proceeds of which are to be used to provide residences for veterans, "(B) the payment of the principal and interest on which is secured by the general obligation of a State, and "(C) which is part of an issue which meets the requirements of subsection 0)(2). "(d) RESIDENCE REQUIREMENTS.—

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