[Code of Federal Regulations] [Title 26, Volume 1] [Revised as of April 1, 2003] From the U.S. Government Printing Office via GPO Access [CITE: 26CFR1.25-1T] [Page 54-56] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY PART 1--INCOME TAXES--Table of Contents Sec. 1.25-1T Credit for interest paid on certain home mortgages (Temporary). (a) In general. Section 25 permits States and political subdivisions to elect to issue mortgage credit certificates in lieu of qualified mortgage bonds. An individual who holds a qualified mortgage credit certificate (as defined in Sec. 1.25-3T) is entitled to a credit against his Federal income taxes. The amount of the credit depends upon (1) the amount of mortgage interest paid or accrued during the year and (2) the applicable certificate credit rate. See Sec. 1.25-2T. The amount of the deduction under section 163 for interest paid or accrued during any taxable year is reduced by the amount of the credit allowable under section 25 for such year. See Sec. 1.163-6T. The holder of a qualified mortgage credit certificate may be entitled to additional withholding allowances. See section 3402 (m) and the regulations thereunder. (b) Definitions. For purposes of Secs. 1.25-2T through 1.25-8T and this section, the following definitions apply: (1) Mortgage. The term ``mortgage'' includes deeds of trust, conditional sales contracts, pledges, agreements to hold title in escrow, and any other form of owner financing. [[Page 55]] (2) State. (i) The term ``State'' includes a possession of the United States and the District of Columbia. (ii) Mortgage credit certificates issued by or on behalf of any State or political subdivision (``governmental unit'') by constituted authorities empowered to issue such certificates are the certificates of such governmental unit. (3) Qualified home improvement loan. The term ``qualified home improvement loan'' has the meaning given that term under section 103A (1)(6) and the regulations thereunder. (4) Qualified rehabilitation loan. The term ``qualified rehabilitation loan'' has the meaning given that term under section 103A (1)(7)(A) and the regulations thereunder. (5) Single-family and owner-occupied residences. The terms ``single- family'' and ``owner-occupied'' have the meaning given those terms under section 103A (1)(9) and the regulations thereunder. (6) Constitutional home rule city. The term ``constitutional home rule city'' means, with respect to any calendar year, any political subdivision of a State which, under a State constitution which was adopted in 1970 and effective on July 1, 1971, had home rule powers on the 1st day of the calendar year. (7) Targeted area residence. The term ``targeted area residence'' has the meaning given that term under section 103A (k) and the regulations thereunder. (8) Acquisition cost. The term ``acquisition cost'' has the meaning given that term under section 103A (1)(5) and the regulations thereunder. (9) Average area purchase price. The term ``average area purchase price'' has the meaning given that term under subparagraphs (2), (3), and (4) of section 103A (f) and the regulations thereunder. For purposes of this paragraph (b)(9), all determinations of average area purchase price shall be made with respect to residences as that term is defined in section 103A and the regulations thereunder. (10) Total proceeds. The ``total proceeds'' of an issue is the sum of the products determined by multiplying-- (i) The certified indebtedness amount of each mortgage credit certificate issued pursuant to such issue, by (ii) The certificate credit rate specified in such certificate. Each qualified mortgage credit certificate program shall be treated as a separate issue of mortgage credit certificates. (11) Residence. The term ``residence'' includes stock held by a tenant-stockholder in a cooperative housing corporation (as those terms are defined in section 216(b) (1) and (2)). It does not include property such as an appliance, a piece of furniture, a radio, etc., which, under applicable local law, is not a fixture. The term also includes any manufactured home which has a minimum of 400 square feet of living space and a minimum width in excess of 102 inches and which is of a kind customarily used at a fixed location. The preceding sentence shall not apply for purposes of determining the average area purchase price for single-family residences, nor shall it apply for purposes of determining the State ceiling amount. The term ``residence'' does not, however, include recreational vehicles, campers, and other similar vehicles. (12) Related person. The term ``related person'' has the meaning given that term under section 103(b)(6)(C)(i) and Sec. 1.103-10(e)(1). (13) Date of issue. A mortgage credit certificate is considered issued on the date on which a closing agreement is signed with respect to the certified indebtedness amount. (c) Affidavits. For purposes of Secs. 1.25-1T through 1.25-8T, an affidavit filed in connection with the requirements of Secs. 1.25-1T through 1.25-8T shall be made under penalties of perjury. Applicants for mortgage credit certificates who are required by a lender or the issuer to sign affidavits must be informed that any fraudulent statement will result in (1) the revocation of the individual's mortgage credit certificate, and (2) a $10,000 penalty under section 6709. Other persons required by a lender or an issuer to provide affidavits must receive similar notice. A person may not rely on an affidavit where that person knows or has reason to know that the [[Page 56]] information contained in the affidavit is false. [T.D. 8023, 50 FR 19346, May 8, 1985]