Page:United States Statutes at Large Volume 94 Part 2.djvu/1391

 PUBLIC LAW 96-499—DEC. 5, 1980

94 STAT. 2669

but only if the mortgagor to whom such financing is provided is the first resident of the residence after the completion of the rehabilitation. "(B) QuAUFiED REHABiliTATiON.—For purposos of subparagraph (A), the term 'qualified rehabilitation' means any rehabilitation of a building if— "(i) there is a period of at least 20 years between the date on which the building was first used and the date on which the physical work on such rehabilitation begins, (ii) 75 percent or more of the existing external walls of such building are retained in place as external walls in the rehabilitation process, and "(iii) the expenditures for such rehabilitation are 25 percent or more of the mortgagor's adjusted basis in the residence. For purposes of clause (iii), the mortgagor's adjusted basis shall be determined as of the completion of the rehabilitation or, if later, the date on which the mortgagor acquires the residence. "(8) DETERMINATIONS ON ACTUARIAL BASIS.—All determinations of yield, effective interest rates, and amounts required to be paid or credited to mortgagors under subsection (i)(4)(A) shall be made on an actuarial basis taking into account the present value of money. "(9) SINGLE-FAMILY AND OWNER-OCCUPIED RESIDENCES INCLUDE CERTAIN RESIDENCES WITH 2 TO 4 UNITS.—Except for purposes of

subsections (g) and (h)(2), the terms 'single-family' and 'owneroccupied', when used with respect to residences, include 2,3, or 4 family residences— "(A) one unit of which is occupied by the owner of the units, and "(B) which were first occupied at least 5 years before the mortgage is executed, "(m) SPECIAL RULE FOR ISSUE USED FOR OWNER-OCCUPIED HOUSING AND RENTAL HOUSING.—In the case of an issue—

"(1) part of the proceeds of which are to be used for mortgages on owner-occupied residences in a manner which meets the requirements of this section, and (2) part of the proceeds of which are to be used for rental housing which meets the requirements of section 103(b)(4)(A), under regulations prescribed by the Secretary, each such part shall be treated as a separate issue. "(n) ADVANCE REFUNDING OF MORTGAGE SUBSIDY BONDS NOT PER-

MITTED.—On and after the date of the enactment of this section, no obligation may be issued for the advance refunding of a mortgage subsidy bond (determined without regard to subsection (b)(2))." (b) CLERICAL AMENDMENT.—The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 103 the following new item: "Sec. 103A. Mortgage subsidy bonds." SEC. 1103. INDUSTRIAL DEVELOPMENT BONDS FOR HOUSING PURPOSES LIMITED TO LOW- OR MODERATE-INCOME RENTAL HOUSING.

(a) IN GENERAL.—Subparagraph (A) of paragraph (4) of section 26 USC 103. 103(b) of the Internal Revenue Code of 1954 (relating to industrial development bonds) is amended to read as follows:

�