1.This Act may be cited as the
Veterans Home Loan Refinance
Opportunity Act of 2009
.
2.Modification of
qualified veterans’ mortgage bonds program to allow eligible veterans to
refinance current home loans
(a)Elimination of
refinance prohibition for veterans’ bondsSection 143(b) of the Internal Revenue Code
of 1986 (relating to qualified veterans’ mortgage bond defined) is
amended—
(1)in paragraph (1) by striking
residences
and inserting residences or qualified
refinancing loans
; and
(2)in paragraph (3) by striking
(i)(1),
.
(b)Section 143(l) of the Internal Revenue Code
of 1986 (relating to additional requirements for qualified veterans’ mortgage
bonds) is amended by adding at the end the following:
(6)Qualified
refinancing loanFor purposes
of this subsection, the term qualified refinancing loan means a
loan that is used to refinance acquisition indebtedness (as defined in
subclauses (I) and (II) of section 163(h)(3)(B)(i)) for a principal residence
(within the meaning of section 121).
.
(c)The amendments made by this section shall apply to bonds
issued after the date of enactment of this Act.
3.Inflation
adjustment of state veterans limit
(a)Paragraph (3) of
section 143(l) of the Internal Revenue Code of 1986 (relating to volume
limitation) is amended by adding at the end the following new
subparagraph:
(D)Limitation
adjustment based on inflation
(i)In the case of any
calendar year after 2010, the limit determined under subparagraph (B) for a
State shall be adjusted for such calendar year by multiplying such limit by the
inflation adjustment factor for the calendar year.
(ii)Computation of
inflation adjustment factorFor purposes of clause (i)—
(I)The Secretary shall,
not later than each October 1, determine and publish in the Federal Register
the inflation adjustment factor for the succeeding calendar year in accordance
with this clause.
(II)Inflation
adjustment factorThe term inflation adjustment
factor means, with respect to a calendar year, a fraction the numerator
of which is the CMHPI for the second quarter of the calendar year preceding the
calendar year for which the adjustment is being made, and the denominator of
which is the CMHPI for the second quarter of calendar year 2009.
(III)The
term CMHPI means the Conventional Mortgage Home Price Index
compiled by Federal Home Loan Mortgage Corporation. The CMHPI for any quarter
shall be the CMHPI first published for such quarter.
(IV)No
adjustment shall be made under clause (i) for any year in which the fraction in
subclause (II) is less than 1.
.
(b)The amendments made by
this section shall apply to bonds issued after the date of the enactment of
this Act.
4.Modification of
materially higher yield for mortgages made from qualified veterans’ mortgage
bonds
(a)Mortgage yield
limitation measured under general program obligation provisions
(1)Paragraph
(3) of section 143(b) of the Internal Revenue Code of 1986 (relating to
qualified veterans’ mortgage bond defined) is amended by inserting
(other than paragraph (2) thereof)
after
(g)
.
(2)Subparagraph (C) of
section 143(g)(3) of the Internal Revenue Code of 1986 (relating to
requirements related to arbitrage) is amended by striking 1.125
percentage points
and inserting 1.50 percentage points
.
(3)Section 143(g)(3)
of such Code (relating to requirements related to arbitrage) is amended in the
heading for subparagraph (C) by striking where issuer does not use full 1.125
percentage points under paragraph (2)
and inserting
for certain unused
amounts
.
(b)The amendments made by
this section shall apply to obligations issued after the date of the enactment
of this Act.