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In response to a congressional request, GAO provided information on the role of qualified mortgage bonds in providing financing for first-time home buyers, specifically: (1) the extent to which they assisted low- and moderate-income buyers; and (2) how states are allocating issuance authority under the mandated cap.

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Matter for Congressional Consideration

Matter Status
If issuance authority is extended, Congress should consider including in the Internal Renvenue Code four requirements: (1) those being assisted cannot qualify to purchase the house under conventional requirements; (2) all or a portion of the subsidy should be recaptured at time of sale (based on the extent of appreciation of house price); (3) income eligibility requirements should be adjusted for the purchaser's household size; and (4) bond issuers and participating mortgage lenders should not be allowed to set aside mortgage funds for specific developers.
Closed - Implemented

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