H.R. 10075: First-Time Homebuyer Affordability Act

This bill would change a rule in the tax code that limits how much tax-exempt mortgage bond financing can be issued by state and local governments.

What it does

Under current law, certain qualified mortgage bonds are subject to a statewide volume cap, meaning there is a limit on how much of this financing can be issued. These bonds are a tool that state or local housing agencies can use to help fund mortgages for eligible homebuyers, often first-time buyers.

This bill would remove qualified mortgage bonds from that volume cap. In practical terms, that means these bonds would no longer count against the annual limit on mortgage-bond financing.

How it would work

• It amends Section 146(g) of the Internal Revenue Code.
• It adds qualified mortgage bonds to the list of bond types exempt from the volume cap.
• It makes a related wording change in the tax code to keep the section consistent.
• The change would apply only to bonds issued after the bill becomes law.

What this could mean in practice

If enacted, state and local housing finance agencies could issue more qualified mortgage bonds without being constrained by the existing cap. That could increase the amount of tax-exempt financing available for homebuyer mortgage programs, including programs aimed at helping first-time homebuyers.

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