Section 1 Short title
This Act may be cited as the “Veterans Home Loan Refinance Opportunity Act of 2013”.
Veterans Home Loan Refinance Opportunity Act of 2013
A BILL
To amend the Internal Revenue Code of 1986 to allow eligible veterans to use qualified veterans mortgage bonds to refinance home loans, and for other purposes.
Sec. 2 Modification of qualified veterans’ mortgage bonds program to allow eligible veterans to refinance current home loans
Elimination of refinance prohibition for veterans’ bonds— Section 143(b) of the Internal Revenue Code of 1986 (relating to qualified veterans’ mortgage bond defined) is amended—
in paragraph (1) by striking “residences” and inserting “residences or qualified refinancing loans”, and
in paragraph (3) by striking “(i)(1),”.
Definition— 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 loan—For 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).”
Effective date— The amendments made by this section shall apply to bonds issued after the date of enactment of this Act.
Sec. 3 Inflation adjustment of state veterans limit
In general— 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 general—In the case of any calendar year after 2013, 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 factor—For purposes of clause (i)—
“(I) In general—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 factor—The 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 2013.
“(III) CMHPI—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) Limitation—No adjustment shall be made under clause (i) for any year in which the fraction in subclause (II) is less than 1.”
Effective date— The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.
Sec. 4 Modification of materially higher yield for mortgages made from qualified veterans’ mortgage bonds
Mortgage yield limitation measured under general program obligation provisions—
Effective mortgage interest limitation excepted— 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)”.
Increase in yield limit— 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”.
Clerical amendment— 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”.
Effective date— The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.