### Question
Can you define what qualified rehabilitation means?


### Answer
**Qualified rehabilitation** is defined as the following in *26 U.S.C. § 143*:

> any rehabilitation of a building if—


(i) there is a period of at least 20 years between the date on which the building was first used and the date on which the physical work on such rehabilitation begins,


(ii) in the rehabilitation process—


(I) 50 percent or more of the existing external walls of such building are retained in place as external walls,


(II) 75 percent or more of the existing external walls of such building are retained in place as internal or external walls, and


(III) 75 percent or more of the existing internal structural framework of such building is retained in place, and


  

(iii) the expenditures for such rehabilitation are 25 percent or more of the mortgagor's adjusted basis in the residence

#### Citation:
  - *26 U.S.C. § 143*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS > Subpart A-Private Activity Bonds**

