First-Time Homebuyer Affordability Act

The First-Time Homebuyer Affordability Act (H.R. 10075) removes state volume limits (caps) on "qualified mortgage bonds." It amends Section 146(g) of the Internal Revenue Code of 1986 so that these mortgage bonds no longer count against a state's total annual limit for issuing tax-exempt private activity bonds. It also makes technical updates to tax code section numbers and internal cross-references to reflect this change.

* **State and local governments and housing agencies** that issue private activity bonds and qualified mortgage bonds. * **Issuers and buyers** of municipal private activity bonds. * **First-time homebuyers** who participate in state-sponsored mortgage programs supported by qualified mortgage bonds.

Currently, states face an annual cap on the total dollar amount of private activity bonds—including qualified mortgage bonds—they can issue. If enacted, this bill would: * Permit state and local governments to issue qualified mortgage bonds without counting them toward their annual private activity bond limits. * Allow states to reserve their existing private activity bond capacity for other eligible public-private projects. These changes would apply to qualifying bonds issued after the bill becomes law.

The bill does not directly spend federal revenue, appropriate new federal funds, or impose new taxes or fees. Instead, it changes federal tax rules to allow unlimited issuance of tax-exempt qualified mortgage bonds outside of the existing state volume caps.

* **Timing:** The exemption applies only to bonds issued after the bill is enacted into law; it does not apply retroactively to older bond issues. * **Scope:** The cap removal applies specifically to "qualified mortgage bonds" and does not eliminate volume limits for other types of private activity bonds. * **Unclear details:** The bill summary does not specify or alter the individual eligibility criteria for homebuyers seeking financing under a qualified mortgage bond program, as those remain governed by existing tax laws.

This bill allows state and local governments to issue as many qualified mortgage bonds as they choose without hitting their annual cap on tax-exempt private activity bonds, starting on the day the law takes effect.